Daily Market Trend Guide -- Thursday, August 06, 2015

MARKET REPORT                                                                                August 06, 2015

The Markets posted decent gains yesterday but as such it spent major part of the session in a sideways trajectory maintaining its opening gains. The Markets saw a positive opening and after briefly trading in a range, it gained some further ground. Thereafter, right from late morning trade to late afternoon trade, the Markets spent time in a sideways trajectory trading in a capped and narrow range while maintaining its gains while it also formed its intraday high of 8591.85. The Markets did see a mild spat of profit taking from these levels as it pared some of its gains in the late afternoon trade for a brief period. It once again spent the last hour of the trade in sideways trajectory and finally ended the day at 8567.95, posting a decent gain of 51.05 points or 0.60% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, AUGUST 06, 2015

The Markets are likely to open on a flat to mildly negative note and find itself continue to consolidate in the given broad range. The intraday trajectory that the Markets forms will be crucial but at the same time, the Markets continue to trade below its pattern resistance and this keeps the Markets vulnerable to profit taking bouts from higher levels.

The levels of 8595 and 8640 will act as immediate resistance for the Markets. The supports come in at 8520 and 8460 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.5168 and it continues to remain neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD too remains bearish as it continues to trade below its signal line.

On the derivative front, NIFTY August futures have added over 5.95 lakh shares or 3.71% in Open Interest. This translates into underlying bullish  bias of the Markets. The NIFTY PCR stands at 0.96 as against 0.92 yesterday.

Coming to pattern analysis, the Markets so far continue to trade below its pattern resistance extended trend line drawn from 8000-levels. So long as the Markets continue to tread below this level, it is likely to continue to remain in a broad consolidation range. Also, this is likely to keep the Markets vulnerable to sharp profit taking bouts from higher levels. However, with the overall structure of the Chart read along with lead indicators and F&O data, the undercurrent continue to portray buoyancy.

Overall, the Markets do have some room for its consolidation to continue. Given this fact, we may continue to make some fresh purchases but do so very selectively. However, as mentioned earlier, the overall undercurrent continues to portray buoyancy, any downsides should be utilized to add quality purchases. Overall, cautious optimism is advised for the day.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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