Daily Market Trend Guide -- Tuesday, July 21, 2015

MARKET REPORT                                                                                  July 21, 2015

Markets had a typical consolidation day today as it ended the day with minor losses after recovering some 50-odd points from the low point of the day. The Markets saw a quiet opening on expected lines but soon dipped into the negative after trading positive in the early minutes of the trade. The Markets remained under pressure in the morning trade while it formed its day’s low of 8559 by afternoon. It traded sideways for some time in early second half of the session. However, the last hour and half of trade saw the Markets gathering strength once again. This time, it saw itself recovering all of its losses to trade back into the green. The Markets also went on to form the day’s high at 8624.10. It came off a bit from there and finally settled the day at 8603.45, posting a minor loss of 6.40 points or 0.07% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, JULY 21, 2015

We are likely to see the Markets opening again on a flat note and looking for directions in the initial trade. Today, five NIFTY companies are coming out with numbers and this will have some effect on the sentiments but again, speaking purely on technical grounds, the Markets are less likely to give a runaway up move and they are likely to continue to consolidate in a broad given range.

For today, the levels of 8640 and 8710 are immediate resistance for the Markets. The supports come in at 8560 and 8510 levels.

The RSI—Relative Strength Index on the Daily Chart is 64.9731 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to trade bullish as it is currently above its signal line.

On the derivative front, NIFTY July futures have added another over 2.23 lakh shares or 1.05% in Open Interest. This is clear indication that there has been fresh buying from lower levels yesterday and the up move that we saw from the low point of the day was not just short covering.

Coming to pattern analysis, the Markets are consolidating after nearly 600-odd points pullback from 8000-levels after forming a double bottom. While doing so, it has also formed one higher top and a rising channel as well, which in turn confirmed this bottom. Having said this, the Markets are resisting to a minor trend resistance; to a trend line drawn from the 8000-odd levels. This may not be a major resistance but enough resistance for the Markets to cause it to consolidate at these levels in a broad range. However, given the technical set up, there seems to  be a limited downside to the Markets and more of a ranged consolidation can be expected.

Overall, the Markets are likely to continue to tread a cautious path. We may cite any reason such as results, earnings, etc. for a ranged movement but again, as mentioned above, speaking purely on technical grounds, the Markets are likely to continue with its consolidation within a given range with the levels of 8640-60 range acting as resistance. On the same lines, with the downsides being limited, any downticks should be utilized to make smart purchases. Overall, continuation of neutral to positive outlook is continued for today.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, July 20, 2015

MARKET REPORT                                                                            July 20, 2015

Markets continued to consolidate on Friday as it moved in a very narrow range throughout the session and ended the day with a very minor gain. The Markets saw a modestly positive start and soon formed its intraday high of 8642.95 in the early minutes of the trade. It soon came off from those highs to trade flat. It further went on to dip briefly in the negative and formed the day’s low at 8593.15. After forming the day’s high and low in the morning trade, the Markets spent the rest of the session trading in a sideways trajectory. In the late afternoon trade, it did perk up a bit but came of from those levels as well. It finally ended the day heading nowhere at 8609.85, posting a very minor gain of 1.80 points or 0.02% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, JULY 20, 2015

The Markets are once again likely to open on a flat to mildly positive note and look for directions. However, it is also likely that the Markets do not achieve any directional bias and shows some consolidation at higher levels, resisting to a minor extended trend line resistance. Though all lead indicators and structural formation of the Charts continue to portray underlying buoyancy, some amount of consolidation at higher levels cannot be ruled out, which would be in fact healthy for the Markets.

For today, the levels of 8640 and 8665 will act as immediate resistance levels for the Markets. Supports would come in at 8610 and 8575 levels.

The RSI—Relative Strength Index on the Daily Chart is 65.5847 and it has reached its highest value since last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD is bullish as it continues to trade above its signal line. On the Weekly Charts, the Weekly RSI is 55.8514 and this too has reached its highest  value in last 14-weeks which is bullish. The Weekly MACD however continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY July futures have shed 92,350 shares or minor 0.43% in Open Interest. No major unwinding has been observed. The NIFTY PCR stands at 1.22 as against 1.19 on the previous day.

Coming to pattern analysis, the Markets are likely to face some resistance near its minor trend line drawn from 8000-levels. This does not constitute a major resistance but it can certainly cause a Market to consolidate sideways and in a range bound manner. It is also likely that the Markets moves past this trend line in a day or so without much consolidation. In any case, if we happen to encounter some consolidation at higher levels, it would be perfectly healthy for the Markets.

Overall, as mentioned earlier, the undercurrent in the Markets certainly remains buoyant. Though it is likely  that we may encounter some consolidation at higher levels, it would be in a ranged and sideways trajectory. Any temporary downsides should be utilized to make selective purchases with vigilant protection of profits at higher levels. Overall, neutral to positive outlook is advised for today.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com