Wednesday, July 2, 2014

Daily Market Trend Guide -- Wednesday, July 02, 2014

MARKET REPORT                                                                                   July 02, 2014
The Markets spent the entire session in consolidation yesterday as it opened on a positive note and traded in a very narrow and capped range to end the day with modest gains. The Markets opened positive and after trading in a range in the morning trade, crawled up further by afternoon to post the day’s high of 7649.50. After once a gain trading within limited range, it saw sharp paring of gains from day’s higher levels. Though this paring of gains was within the limited 25-odd points that the Markets traded in the entire session and no levels were breached. It saw some minor recovery coming in again in the last hour of the trade. The Markets finally ended the day at 7634.70, posting a modest gain of 23.35 points or 0.31% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today would be a crucial session for the Markets. The Markets are slated to open on a decently positive note and look for directions. If the Markets open positive as expected, it would open near its all time high immediate top of 7700 levels and its behaviour vis-à-vis the levels of 7700 would be crucial. The Markets might attempt to move past those levels but at the same time the correction setting in after a positive opening near the resistance levels too cannot be ruled out as the indicators throw contradictory readings.

The levels of 7700 would act as immediate resistance level for the Markets. The supports come in much lower at 7575 and 7510 levels.

The  RSI—Relative Strength Index on the Daily Chart is 63.6290 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD still continues to remain bearish as it trades below its signal line. 

On the derivative front, NIFTY July futures have shed over 3.71 lakh shares or 2.65% in open interest. This clearly signifies that selling / offloading in futures have been seen in yesterday’s session.

Going by the pattern analysis, it is clearly evident on the Daily Chart that the Markets have spent last couple of sessions in broad trading range of 200-odd points with the levels of 7500-7510 acting as bottom and the levels of 7700 which have become immediate top for the Markets. The Markets may open positive today but are likely to find resistance near the upper band of the Markets.

Overall, going by the F&O data inputs and the structure of the Daily Chart, the Markets will open higher today but there would be equal amount of chance that some correction or some mild spate of profit taking creeps in from higher levels. It is advised to stick vehemently to defensives and avoid high beta stocks while making purchases and continue to protect profits at higher levels. Moderate exposures and caution are advised or today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331



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