MARKET TREND FOR TUESDAY, JULY 05,
2016
The Markets posted its sixth day of gains
yesterday and ended yet another day with gains. However, it has displayed some
signs of impending weariness at higher levels. Today, we can expect the Markets
to open on a modestly negative note and look for directions. We have a
truncated week this time and we can fairly expect the Markets to trade in a
capped range and consolidate at current levels which would be in turn, healthy
for the Markets.
For today, 8395 and 8435 will act as
immediate resistance levels for today. The supports come in lower at 8350 and
8305 levels.
The RSI—Relative Strength Index on the
Daily Chart is 65.2047 and it has reached its highest levels in last 14-days
which is bullish. It does not show any bullish or any bearish divergence. The
Daily MACD has given a positive crossover and it is now bullish as it trades
above its signal line.
On the derivative front, the NIFTY July
futures have added over 3.24 lakh shares or 1.73% in Open Interest. The NIFTY
PCR stands at 1.04 as against 0.98 yesterday.
Coming to pattern analysis, the Markets
have not only managed to recover all of its losses post June 24th
but have also managed to deliver a breakout by moving past its previous
intermediate top of 8298. Having said this, the Markets are currently back into
the upper rising channel drawn from the lows of February. Given the fact that
the Markets have posted gains for six straight sessions, it is very much likely
that it sees some consolidation at higher levels. If it actually does, it would
be, in fact healthy for the Markets. All lead indicators very clearly suggest
that the uptrend in the Markets remains intact and the under current remains buoyant.
All and all, we are likely to see a
modestly negative opening in the Markets today, the undercurrent continues to
remain buoyant. In event of consolidation happening, we will see some sectoral
rotation as well. It is best advised to avoid shorts and make selective
purchases in the sectors that were lagging so far. While utilizing each up
moves in protecting profits, cautious optimism is advised for the day.
Milan Vaishnav,
CMT
Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical
Market Analysts, (ATMA), INDIA
+91-98250-16331
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