MARKET REPORT July
17, 2014
After remaining range bound with capped gains for most part
of the session, the Markets saw a sharp spurt in the last hour of the trade
mostly led by banks to end the day with
decent gains. The Markets opened on a positive note and remained positive
throughout the session. It spent the first half of the session in a capped
range while it formed the intraday low in the early afternoon trade at 7532.45
when the Markets traded nearly flat with minor gains. This sidewards movement
continued much until late afternoon trade. It was just last hour of the trade
that saw a sharp spurt. The Markets formed its intraday high of 7640.10 in a
nearly parabolic rise. It maintained those levels until close and finally ended
the day at 7624.40, posting a decent gain of 97.75 points or 1.30% 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 flat and quiet note
and look for directions. As the pattern analysis suggests, the Markets have
avoided a negative breach below 7500 levels by staging a smart pullback.
However, it continues to remain in a broad trading range with unclear
directional bias. Today, the intraday trajectory would continue to remain
important but bout of profit taking at higher levels cannot be ruled out.
For today, the levels of 7655 and 7690-7700 levels would act
as resistance for the Markets. The supports exist lower at 7560 and 7500
levels.
The RSI—Relative Strength Index on the Daily Chart is 55.76
and it is neutral as it shows no bullish or bearish divergence or any kind of a
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 1.64 lakh shares or 1.14% in Open Interest. This shows some fresh built up
of long positions yesterday. Though this addition of OI cannot be called
significant.
Going by the pattern analysis, as mentioned earlier, the
Markets have avoided a negative breach below 7500 levels by taking support very
near to its 50-DMA. However, with the technical pullback, the Markets are back
in a trading range. For coming couple of sessions, the Markets would continue
to trade in a range in a bit volatile manner until it establishes a clear
directional bias.
All and all, given the overall condition and structure of
the Charts, we advice to adopt highly stock specific approach. Fresh purchases should
be very selective and should be kept limited to defensives and high beta stocks
and short position should be avoided. While continuing to maintain liquidity cautious
optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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