MARKET REPORT July
4, 2014
After attempting a fresh breakout by moving past the levels
of 7700 a day before, the Markets continued to consolidate yesterday in a
narrow range and ended the day above 7700 levels, but with modest losses. The
Markets opened on a positive note and soon formed its intraday high of 7754.65
in the early minutes of the trade. Soon after forming this level, the Markets
retraced and dipped into negative. It recovered back into the positive
territory but the Markets spent the rest of the session in an extremely capped
range. It move sideways until the late afternoon trade and then again drifted
into the red. It went on to form the day’s low of 7706.80 towards the end of
the session and finally ended the day at 7714.80, posting a minor loss of 10.35
points or 0.13% while continuing to form a higher top and higher bottom on the
Daily High Low Charts.
MARKET TREND FOR TODAY
Today, again, expect the Markets to open on a mildly
positive note and look for directions. The analysis for today remains more or
less on yesterday’s lines. The Markets have attempted a breakout and have
managed to keep its head above the 7700-level. In order to confirm the breakout
and continue with the up move, the Markets will need to trade above 7700
levels. Any drift below this level will bring some consolidation in the Markets
again.
For today, the levels of 7745 and 7760 would act as
immediate resistance levels for the Markets. The supports exist at 7700 and
then at 7610 levels.
The RSI—Relative Strength Index on the Daily Chart is
67.1275 and it is neutral as it shows no bullish or bearish divergence or any
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 shed
over 1.65 lakh shares or 1.14% in Open Interest. This certainly translates into
unwinding of some positions again from the yesterday’s high levels.
Going by the pattern analysis, the Markets have ended near
the low point of the day even if it kept its head above the critical 7700
levels. As mentioned earlier, it will have to trade above 7700 levels in order
to prevent any weakness creeping in. Further to this, it would be necessary for
the Markets to trade above 7700 levels in order to confirm the breakout. The
volumes and the behaviour of the Markets vis-a-vis the levels of 7700 would
therefore remain critically important.
Overall, we continue with the strategy of remaining moderately
leveraged in the Markets. Fresh purchases should be kept limited to defensives
and profits should be vigilantly protected. While maintaining adequate liquidity,
continuance of cautious approach is advised in the Markets today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.