Monday, August 1, 2016

Daily Market Trend Guide -- Monday, August 01, 2016

MARKET TREND FOR MONDAY, AUGUST 01, 2016
Markets took a breather on Friday from the up move that it witnessed over previous week and ended the day with modest losses while it consolidated. However, the Markets continued to display typically liquidity-fueled strength and resilience and today, it is  once again expected to open on a higher note. The Markets may post fresh 52-week highs today but at the same time, caution stands at elevated levels.

For today, the levels of 8670 and 8705 will act as immediate resistance levels while the supports would come again lower at 8570 and 8535 levels.

The RSI—Relative Strength Index on the Daily Chart is 66.1996 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continue to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY August futures have added over3.23 lakh shares or 1.48% in Open Interest.

Coming to pattern analysis, the Markets have continued to remain in the upward rising channel drawn from February lows. As mentioned often, the Markets have successfully managed to remain in this upward rising channel. It has been displaying good amount of resilience and strength as after each up move, the Markets are showing a range bound consolidation and the corrections have remain limited in the form of intermittent selling bouts and flat endings at Close levels. However, it is also important to note that it has been tracking the upper line of the channel and as mentioned often in our previous editions, it is also continuing to display mild signs of fatigue at higher levels.

Overall, though the Markets are expected to start positive, the caution levels too stand at elevated levels. The Markets will continue display strength and will also continue to see stock specific out performance but continue to reiterate our view to use upsides more for protecting profits at higher levels and keeping fresh purchases highly selective and extremely stock specific. Overall, positive but cautious outlook 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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