Monday, July 22, 2013

Daily Market Trend Guide -- Monday, July 22, 2013

MARKET REPORT                                                                                            July 22, 2013
The Markets on Friday headed nowhere as it moved in either directions and traded in a capped range to finally end the day with very modest losses. The Markets opened on a modestly positive note and traded with capped gains in the morning session of the trade. The Markets pared those little gains in the afternoon and dipped into the red. The second half of the trade once again saw the Markets recover from those lower levels and it went back into the positive, this time to record the day’s high of 6066.85. This too was not sustained by the Markets as it came off from those levels as well. It slipped modestly into the red this time to give the day’s low of 6020.25. A very modest recovery was seen at the Close and the Markets finally ended the day at 6029.20, posting a very nominal loss of 8.85 points or 0.15%.

MARKET TREND FOR TODAY

For today, expect the Markets to open on a flat note and look for directions. The lead indicators of the Markets remain neutral to mildly bullish. For today intraday trajectory that the Markets forms after opening would be crucial to decide the trend for the day. With analysis of the technical indicators on Daily and Weekly Charts, the trend would likely to remain overall bullish in the immediate short term.

For today, the levels of 6070 and 6090 shall pose as immediate resistance on the Daily Charts. The supports come in at 5980 an 5965 on the down side.

The lead indicators on the Daily and Weekly Charts are neutral to bullish. The RSI—Relative Strength Index on the Daily Chart is 59.6983 and it shows no bullish or bearish divergence or any failure swings and is therefore neutral. The Daily MACD continues to remain bullish as it trades above its signal line. 

On the Weekly Charts, the RSI remains neutral. The Weekly MACD reported a positive crossover and it now trades above its signal line and is therefore Bullish.

On the derivative front, the NIFTY  July futures have added in net Open Interest which is a positive sign. The NIFTY PCR stands at 1.31 as against 1.33.

Overall, this being a the expiry week now the Markets will see rollovers begin and for the most part of the week is likely to remain dominated with rollover centric activities. However, given the combined reading of the Daily and the Weekly Charts, the even if this rollovers keep the Markets in a range bound trade or little  volatile, the overall trend is likely to remain intact with a upward bias.

All and all, with the flat opening expected, the intraday trajectory remains crucial. Even with the Markets getting little weaker, it is not likely to breach any important supports. Volatility may remain and we will continue to see selective out performance. Further to this, with the lead indicators on both the Daily and the Weekly Charts remaining intact, even if the Markets consolidate a bit, it would be with an upward bias. While continuing to avoid shorts, fresh purchases may be made and at the same time, profits too should be vigilantly protected. Overall, cautious optimism is advised for today. 

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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