Friday, July 18, 2014

Daily Market Trend Guide -- Friday, July 18, 2014

MARKET REPORT                                                                                         July 18, 2014
The Markets demonstrated a very cautious mood yesterday as it spent the entire session in a narrow 25-odd points range and ended the day on nominal gains. The Markets opened on a quiet note and after trading in a capped range in the morning trade, formed its intraday low of 7612.70. The second half of the session saw some positive movements in the Markets as the Markets attempted a rebound and surged further on the upside to form the day’s high of 7655.65. The Markets did not sustain these levels as it was deprived of volumes and pared these gains. It continued to hover in a capped and limited range and finally ended the day at 7640.45, posting a very nominal gain of 16.05 points or 0.21% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, expect the Markets to open on a mildly negative note and trades with losses in the initial trade. Though technicals continue to remain weak, it is likely to be reacting to the geopolitical tensions that has cropped up yesterday. The Markets have continued to remain in a broad trading range as evident from the Daily Charts and the levels of 7700 would continue to act as immediate top for the Markets. 

Today, the levels of 7680 and 7715 would act as immediate resistance for the Markets. The supports come in much loser around 7500-7525 levels.

The lead indicators too do not throw a pretty picture. The RSI—Relative Strength Index on the Daily Chart is 56.7013 and it is neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bearish as it trades below its signal line. 

On the derivative front, the NIFTY July futures have added over 2.67 lakh shares or 1.84% in Open Interest. This signifies that the session witnessed some short covering from lower levels yesterday and the session also saw some more longs getting added into the system.

The pattern analysis of the Markets clearly suggests that the Markets has continued to be in broad trading range of 7500-7700 and to give a upward positive breakout, it will once again have to move past the levels of 7700 and also the highs of 7808 which has now become a immediate top. Until this happens, it will continue to remain in trading range with negative bias. Today’s lower opening will keep the Markets in such trading range.

All and all, given the above reading, the volatility shall remain ingrained in the Markets as the Markets continue to trade in a broad trading range. Until the Markets attempts to move past  the levels of 7700 with volumes, this structure would remain on the Charts which will keep the overall Markets away from a runaway rise. The purchases, in such condition, should be extremely selective with more tilt on the defensives. Overall, stock specific optimism is advised for today.

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



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