MARKET TREND FOR TUESDAY, JULY 19,
2016
Markets traded precisely on analyzed lines as
it gave up at its intraday high, witnessed a selling bout from higher levels
and consolidated to end with minor losses. We continue to keep our analysis for
today on similar lines. Markets are expected to see a quiet to modestly
positive opening and will look for directions. It is very much likely that the
yesterday’s high has now become an immediate top for the Markets and the
Markets will continue to consolidate while maintaining this level as its
intermediate top.
For today, the levels of 8585 and 8595 will
act as immediate resistance levels for the Markets. The supports come in much
lower at 8460 and 8410 levels.
The RSI—Relative Strength Index on the
Daily Chart is 66.3587 it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD stays bullish as it continues
to trade above its signal line. On the Candles, a big black candle has
occurred. Since this has occurred near a resistance area after a good amount of
up move, this has added credibility to the overhead resistance for the Markets.
On the derivative front, the NIFTY July
futures have shed over 1.39 lakh shares or 0.62% in Open Interest. This shows
some unwinding from higher levels in the Markets.
Coming to pattern analysis, as mentioned
often in our previous editions, the Markets have put on significant gains after
breaking out above its previous top of 8295 levels. Post that, it has
consolidated in between for a couple of days and it is now tracking the upper
line of the upward rising channel that it has formed from its February lows.
Having said this, though it trades comfortable within this rising channel, it
had got overbought and some amount of consolidation was imminent. The Markets
have shown signs of fatigue in previous two sessions and yesterday, it
witnessed a selling bout from higher levels to end with minor losses. With
today’s modestly positive opening expected, we can fairly expect the Markets to
consolidate once again at higher levels.
As we keep our reading for the Markets on
similar lines, even with the positive opening expected, the levels of 8595-8600
levels will continue to act as immediate resistance levels for the Markets.
Since the Markets have continued to display great amount of inherent strength,
shorts should be avoided but the up moves should be utilized to protect profits
at higher levels and any downsides should be used to make quality purchases as
sectoral rotation continues in the Markets.
Milan
Vaishnav, CMT
Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
