MARKET REPORT July
24, 2014
The Markets continued to inch upwards on expected lines and
tested its lifetime highs again before paring of some gains from the top and
ending the day with modest gains. The Markets opened on a positive note and
soon inched upwards to test the day’s high of 7809.20 in the first hour of the
trade. Thereafter the Markets started seeing some selling pressure coming in as
it started paring some of its gains. The Markets turned into falling trajectory
and by late afternoon trade pared all of its gains to dip into negative. It
went on to form the day’s low of 7752.90. The last hour of the trade saw some recovery
as the Markets crawled back into the green. It finally ended the day at
7795.75, posting a net gain of 27.90 points or 0.36% while forming a higher top
and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to take some breather from the up
move that it has been witnessing since last seven sessions. The Markets have
resisted to its previous top of 7809 and today this level would continue to
pose some resistance. The Markets are expected to see flat to mildly negative
opening and is likely to consolidate and witness some profit taking from higher
levels.
For today, the level of 7809 would continue to act as
immediate resistance. The supports come in much lower at 7740 and 7670 levels.
The RSI—Relative Strength Index on the Daily Chart is 65.45 and it does not show any
failure swings. However, NIFTY has set a new 14-period high whereas RSI has not
yet and this is Bearish Divergence. The Daily MACD continues to remain bullish
as it trades above its signal line.
On the derivative front, the NIFTY has added over 4.22 lakh
shares or 2.58% in Open Interest. This indicates that building of long
positions continued in yesterday’s session as well.
Pattern analysis of the Charts clearly suggest that the
Markets have formed a Double Top at 7809 levels and this Double Top formation
is expected to pose resistance to the up move in the immediate short term. The
Markets will have to move past this level with volumes an sustain above that to
make a fresh breakout. However, until this happens some consolidation and
profit taking cannot be ruled out.
Overall, today might be the day of consolidation for the
Markets. We advise you to refrain from blanket buying and continue to restrict
purchases only to the selective stocks while maintaining adequate liquidity as
profit taking bout from higher levels cannot be ruled out. Overall, cautiously
neutral outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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