MARKET REPORTB
July 15, 2013
The Markets continued with its robust up move as it opened
positive, traded with capped gains and perked up further to end the day with
strong gains. The Markets opened on a
decently positive note and after opening into positive, traded sideways with
capped gains. The Markets maintained these gains until most part of the
session. However, in the last hour and half of the gains, the Markets perked up
further and went on to move past the psychological 6000 market and went on to
give the day’s high of 6019. The Markets sustained those strong gains and
managed the end the day near its highest point at 6009, posting yet another robust
gain of 73.90 points or 1.25% forming a sharply higher top and higher bottom on
the Daily High Low Charts.
MARKET TREND FOR TODAY
On the Daily Charts, the Markets have successfully achieved
a breakout on the upside from the broad trading range and it is expected that
the Markets shall extend its gains in the immediate short term. Expect the
markets to open on a flat to modestly positive note and look for directions.
However, given the sharp rise, minor profit taking at higher levels cannot be
ruled out while keeping the overall trend intact.
For today, the levels of 6035 and 6090 are immediate
resistance on the Daily Charts. The supports come in at 5951 and 5920 levels.
All lead indicators continue to remain firmly in place. The
RSI—Relative Strength Index on the Daily Chart is 60.4332 and it has reached its
highest value in last 14-days which is bullish. It does not show any bullish or
bearish divergence. The Daily MACD continues to remain bullish as it trades
above its signal line. On the Candles, A rising
window occurred (where the top of
the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a
bullish trend. There have been 7 rising
windows in the last 50 candles--this makes the current rising window
even more bullish.
On the Weekly Charts, the RSI is 56.2327 and it is
neutral as it shows no bullish or bearish divergences or any kind of failure
swings. The Weekly MACD is bearish as it trades below it signal line but it is
moving towards reporting a positive crossover.
On the derivative front, the NIFTY July Futures have
continued to add over 8.44 lakh shares or over 5.02% in Open Interest. This
further continues to suggest long built up and also signifies that the Friday’s
rise has been due to addition of longs and not due to short covering.
Having said this, it is clear that the Markets have
added long positions while it broke out from its trading range. The markets
have successfully achieved a breakout and now the key would be to see if it
sustains it. However, due to sharp rise in previous two sessions, mild chances
of minor profit taking at higher levels cannot be ruled out. However, given all
the technical factors that remain absolutely in place, the Markets are expected
to test 6100 levels before it consolidates again.
All and all, as stated above, all lead indicators and
technicals remain firmly in place. There is no external event either that would
pose immediate threat to the Markets in the immediate short term. Given this,
it is likely that the Markets continue to extend its up move. However, given
the sharp rise in previous two session, mild chances of profit taking at higher
levels cannot be ruled out. This is keep the markets in trade in narrow band.
However, while shorts should be avoided, any dip should be used to add
selective long positions. Overall, continuation of positive outlook is advised
for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
