MARKET TREND FOR FRIDAY, JULY 22,
2016
The levels of 8595 levels continued to
remain sacrosanct as the Markets continued to consolidate and did not break out
above 8595-8610 levels yesterday while it ended the day with modest losses. The
Markets have been consolidating heavily and today is likely to remain no
different. With the levels of 8595 continuing to remain an immediate top for
the Markets, we can fairly expect the Markets to open on a flat to mildly
positive note and continue to consolidate. The levels mentioned will continue
to remain immediate top and resistance for the Markets.
For today, the levels of 8595 and 8625 will
continue to act as immediate resistance levels for the Markets. The supports
come in at 8475 and 8410 levels.
The RSI—Relative Strength Index on the
Daily Chart is 63.2304 and 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. However, it is moving towards reporting a negative
crossover. On Candles, an engulfing bearish pattern has occurred. When
this appears during an
uptrend which appears to be the case with NIFTY, this can mark a potential top
for the Markets.
On the derivative front, the NIFTY July
futures have over 3.92 lakh shares or 1.67% in Open Interest. This shows that
some amount of long unwinding has happened in the yesterday’s session.
Coming to pattern analysis, as mentioned
often in our previous editions, the Markets have been consolidating after it
broke on the upside above 8295 levels. In last week, the Markets have been consolidating
after it marked the level of 8595 as its immediate high. This level has been
acting as immediate top for some time for the Markets. It is very much expected
that the Markets will take some time before it gives yet another runaway rally
and this level will continue to mark an immediate top for the Markets.
All and all, no significant up move shall
occur until the Markets moves past the levels of 8595-8610. However, given the
reading of the lead indicators along with F&O data, it appears that it
would be some time before the Markets gives a fresh break out and in immediate
short term, we might continue to see the Markets consolidating. However, such consolidation
will happen in a range and while the Markets continue to display good amount of
inherent strength, volatility will continue to remain ingrained in the session.
Overall, cautious outlook is advised for the day.
Milan
Vaishnav, CMT
Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
