MARKET REPORT July
28, 2014
After eight days of advance the Markets took a breather on
Friday as it ended the day with modest losses. The Markets opened on a flat
note and after trading in extremely narrow range near its previous close the
Markets dipped into the red in the early minutes of the trade. The Markets
continued to gradually decline and by afternoon trade went on to form the day’s
low of 7748.60. However, the Markets attempted to stabilize in the second half
of the session as it showed some recovery from its’ day’s low. It did manage to
recover some of its losses but continued to trade in the negative territory.
The Markets finally managed to end the day at 7790.45, posting a net loss of 40.15
points or 0.51% while forming a slightly higher top but sharply lower bottom on
the Daily High Low Charts.
MARKET TREND FOR TODAY
Though the Markets tested its fresh lifetime highs on
Friday, it has not yet given a confirmed breakout and the levels of 7816-7840
continue to act as double top resistance. Today, expect the Markets to once
again open on a quiet and flat note and look for directions. Until the Markets
move past its previous top, it would continue to remain in consolidation stage
and it is showing some possibility of weakness creeping in.
For today, the levels of 7816 and 7840 would act as immediate
resistance for the Markets. The supports come in at 7700 and 7680 levels.
The RSI—Relative Strength Index on the Daily Chart is
63.2255 and it is neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD is bullish as it trades above its signal line.
On the Weekly Charts, the Weekly RSI is 71.3815. It remains in “overbought”
territory and also shows a Bearish Divergence as the Weekly NIFTY has posted a
fresh 14-period high whereas RSI has not. The Weekly MACD continues to trade
above its signal line.
On the derivative front, NIFTY July futures have shed over
16.01 lakh shares or 9.73% in Open Interest. Though there were some rollovers
that were reported to have begun, some offloading was also seen in Friday’s
session.
Going by the pattern analysis, the Markets have been seeing
a Double Top resistance at 7816-7840 levels and have not given a breakout
despite seeing fresh lifetime highs on Friday’s session. The Markets continues
to trade below this level and it will have to move past its previous highs to
confirm a breakout. However, given the overall structure of the Charts, read
along with the lead indicators on the Daily and Weekly Charts, the run-away
rise in the Markets is less likely even if its shows some positive trade.
Overall, it is advised to protect profits at higher levels
and keep booking them with every rise. While further buying should be avoided,
it should be restricted to extremely selective purchases while maintaining
adequate liquidity. Overall, mild caution is advised in the Markets.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
The BSE Sensex and Nifty fell on Monday to their lowest close in a week, as profit-taking hit shares of blue-chips such as ICICI Bank for a consecutive session after the record highs of last week.
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