MARKET REPORT July
21, 2014
The Markets had a near consolidating session Friday as it
opened on a lower note and improved as it went ahead in the session by ended
yet another day with modest gains. On back of negative global cues, the Markets
opened on a negative note and formed its intraday low of 7595.50 in the early
minutes of the trade. The morning trade saw the Markets trading in negative but
it slowly and gradually recouped all of its losses. It went into positive
territory but pared those gains again to trade flat by afternoon trade.
However, the second half of the session saw Markets putting on modest gains as
it formed its day’s high of 7685 in the late afternoon trade. The Markets came
off a bit from these levels as well and finally ended the day at 7663.90,
posting a modest gain of 23.45 points or 0.34% while forming a higher top but
lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a flat to mildly
positive note and continue with its up move. Most of the today’s positive
opening would be contributed to the RIL share which is likely to open positive
following is results. With today’s continued up move, the Markets shall open
once again near its upper band of resistance of 7700 levels and its behaviour vis-à-vis
this levels as we go ahead in the session would be critically important. There
are mild chances that the Markets see some profit taking around these levels.
For today, the levels of 7700 and 7720 would act as
resistance. The supports come in at 7580 and 7520 levels.
The RSI—Relative Strength Index on the Daily Chart is 58.11
and it is neutral as it shows no bullish or bearish divergence or any kind of
failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.
On the derivative front, the NIFTY July futures have added
2.07 lakh shares or 1.40% in Open Interest. This signifies that there has been
some modest addition in long positions in Friday’s session.
Going by the pattern analysis the Markets survived its
negative downward breach when it moved below the levels of 7500 couple of
sessions ago. It pulled back into the broad trading range of 7500-7700 soon
after that. Today’s positive opening would take its around its upper band
resistance level of 7700 and it would be critically important to see if the
Markets moves past this level or sees some profit taking around this level. The
Market have formed an top of 7809 which it will have to move past for a fresh
upward breakout. However, the level of 7700-7710 would act as key resistance
level.
Given the above reading, its is advisable to protect profits
once we see a positive opening today. Profits should be vigilantly protected
around 7700-7710 levels. Any fresh positions should be extremely selective and
stock specific and should be possibly in the defensives. While avoiding shorts,
liquidity should be maintained. Cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
