MARKET TREND FOR THURSDAY, JULY 14,
2016
The Markets continued to consolidate in
yesterday’s session and traded much on analyzed lines as it ended flat with
nominal losses after remaining in tight range. Today, we continue to put our analysis
on similar lines. The Markets are likely to see a quiet and flat opening and it
has shown increased signs of fatigue at higher levels. It is very much likely
that it continues to remain with a capped upside with vulnerability of selling
bouts at higher levels.
For today, the levels of 8550 and 8575 will
act as immediate resistance levels for the Markets. The supports come in at
8480 and 8415 levels.
The RSI—Relative Strength Index on the
Daily Chart is 7051.93 and it remain in “overbought” territory. It does not
show any failure swing. It also does not show any bullish or bearish
divergence. The Daily MACD remains bullish as it trades above its signal line.
On the Candles, a black candle very near to a hanging man has appeared.
Though this is not a classic hanging man formation, it does show a
potential halt in the uptrend in the Markets.
On the derivative front, the NIFTY July
futures have added yet another over 1.79 lakh shares in Open Interest. The
NIFTY PCR stands at 1.04 as against 1.24.
If we look at pattern analysis, the Markets
gave a break out on the upside while moving past its previous intermediate top
of 8295-8298 levels. It broke out on the upside, consolidated again for a
couple of days and went on to put on further gains. The Markets have risen
nearly 225-odd points since its last previous top and nearly 575-odd points
from the June 24th lows. Though it has fortified its up moves by intermittent
consolidation, the Markets are now showing some signs of weariness as well. It
did tested its logical targets of 8550 but it now trades in “overbought”
territory and the breadth is getting little weaker.
Overall, keeping into account that the lead
indicators trade overbought and the breadth has grown weaker over previous
couple of sessions, we cannot rule out the possibility of the Markets
consolidating or showing corrective profit taking bouts at higher levels. It is
reiterated to keep purchases limited to sectors that are witnessing rotational
preference and use all up moves in protecting existing positions in the
Markets. However, corrections, if any, will be healthy for the Markets as the
inherent trend remains buoyant.
Milan
Vaishnav, CMT
Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
