Daily Market Trend Guide -- Monday, July 13, 2015

MARKET REPORT                                                                                             July 10, 2015

Friday’s session saw the Markets continue to consolidate in a choppy trade as it ended the day with modest gains after spending nearly entire session on a flat note. The Markets saw a positive opening but at the same time continued to resist near its 200-DMA levels. Post positive opening, the Markets pared its morning gains to trade flat and even dip slightly in the negative. The remaining part of the session was spent in a very narrow range with the Markets completely lacking directional bias. It was the last half an hour of the trade which saw the Markets making an up move. It also went on to form its day’s high of 8377.10. It hovered around a bit near those levels and finally settled the day at 8360.55, posting a net gain of 32 points or 0.38% but still formed a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, Monday, 13 July 2015

The Markets are expected to start the week on a flat note. The consolidation, which markets are in in for last few trading sessions, would continue today also. Technically speaking, the Nifty continues to remain in its filter of 200 DMA- Daily Moving Average. Consolidation of Nifty is likely to continue within the filter range of its 200 DMA , that is , 8323 on the lower side and 8385 on higher side.

Likewise, for today, intraday range of the market is expected between these levels of 8323 – 8385 as these levels are expected to act as support and resistance respectively.
 

On Candles chart, A long lower shadow occurred. This is typically a bullish signal particularly when it occurs near a low price level, at a support level, which is the case with Nifty, and technically this limits downside in the market. Currently important indicator MACD is not in Overbought/Oversold range.is bullish since it is trading above its signal line. Another important indicator RSI also does not show any bearish signs.
 

Pattern Analysis indicates that the markets are not above to break above its 200 DMA and this is acting as its resistance levels, both intraday day and at close. However, even though Nfity is trading below its 200 DMA it has not broken down below its filter range. Hence markets are experiencing consolidation. This, along with the other technical reading of indicators, chances of downward movement in the market are less and ranged, and the overall technical picture of the market has a bullish bias.
 

Till Nifty trades and closes above its 200 DMA, it will be range bound. Intraday and short term traders are advised to protect profits at every high in the market . Long term investors can remain invested. Cautious 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

Daily Market Trend Guide -- Friday, July 10, 2015

MARKET REPORT                                                                                         July 10, 2015

The Markets remained in corrective mode and ended the day with modest losses after spending the session trading on a flat note and on lower volumes. The Markets saw a good positive start and formed its intraday high of 8400.30 in the early minutes of the trade. The Markets failed to remain above its 200-DMA levels and dipped below it after trading briefly above that. The Markets pared its opening gains and traded into negative in late morning trade. It did manage to recover and trade back into positive territory but it did so very briefly. The Markets slipped in the last hour and half of trade and went on to form the day’s low of 8323. No major recovery was seen from these levels and the Markets finally ended the day at 8328.55, posting a modest loss of 34.50 points or 0.41% while continuing to form lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JULY 10, 2015

The Markets are expected to open on a modestly positive note and trade positive in the initial trade. The Markets are in consolidation mode and are within its filter of 200-DMA at Close levels and is expected to remain in this range for a while. The Markets are likely to consolidate  with the levels of 200-DMA, i.e. 8384 on the upside. Fresh upsides will only occur above this level and until then, we can expect the Markets to continue to see ranged consolidation. Markets would also react to IIP data coming in evening and also to Inflation figure on Monday.

For today, the levels of 8384 and 8450 would act as important resistance for the Markets. The supports come in at 8300 and 8270 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.6701 and it has reached its lowest value in last 14-days. The RSI has also set a fresh 14-period low but NIFTY has not yet and this is Bearish Divergence. The Daily MACD is bullish as it continues to trade above its signal line.

On the derivative front, NIFTY July futures have shed over 3.20 lakh shares or 1.76% in Open Interest. This shows some unwinding of positions yesterday.

Coming to pattern analysis, the Markets have halted its pullback after failing to move past its 100-DMA. In normal circumstances, it was supposed to consolidate between its 200-DMA and 100-DMA but it has breached its 200-DMA as well. Having said this, it is important to note that it still remains just within the filter of 200-DMA and with today’s positive opening, there are fair chances that the Markets continues to consolidate and shows limited downside risks. However, fresh up move shall occur only after the Markets moves past 8400 levels comprehensively.

All and all, as mentioned, until the Markets moves past 8400-levels, it will continue to consolidate with a mild downside bias. Given this technical structure, it is advised to now restrain fresh purchases and remain away from taking large directional exposures. More liquidity should be maintained and fresh purchases should be curtailed until the directional bias is established. Until then consolidation and mild downside risk would continue. Cautious 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