MARKET REPORT July
22, 2014
The Markets traded yesterday precisely on the analysed lines
as the levels of 7700 continued to pose immediate resistance for the Markets.
The Markets opened positive on back of positive global cues and also attempted
to move past the levels of 7700. In the morning trade, the markets formed an
intraday high of 7722.10. However, after trading with gains around this level,
the Markets started paring of its gains. It spent rest of the session in slowly
and gradually coming off from the intraday highs. By end of the session, it
pared nearly bulk of its gains while forming the day’s low of 7674. The Markets
deliberated around these levels and finally managed to end the day at 7684.20,
posting a net gain of 20.30 points or 0.26% while continuing to form a higher
top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Though the Markets have ended with gains for fifth day in a
row, the today’s session is all set to remain more or less on similar lines
that of yesterday. Today, the Markets are likely to open again with modest
gains and the opening levels would see the Markets once again around 7700
levels. The behaviour of the Markets after opening vis-à-vis the levels of 7700
would continue to remain critical to decide the trend for today.
For today, the levels of 7700-7710 and 7745 would act as
resistance and the supports would come in much lower at 7610 and 7540 levels.
The RSI—Relative Strength Index on the Daily Chart is 59.34
and it continues to remain neutral without showing any bullish or bearish
divergences or any failure swings. The Daily MACD too continues to remain
bearish as it trades below its signal line.
On the derivative front, the NIFTY July futures have shed
13,500 shares or nominal 0.09% of Open Interest. Stock futures too have
witnessed a very nominal decline in over all Open Interest. The NIFTY PCR
stands unchanged at 0.87.
Pattern analysis clearly suggests what we have often repeated
in our previous editions of Daily Market Trend Guide. The levels of 7700 have
continued to pose immediate resistance for the Markets and the Markets shall
try and reach out to its immediate top of 7809 only if it moves past the level
of 7700. There are chances that we see some profit taking coming in a gain
around 7700 levels as that is a
immediate resistance for the Markets and the upper band of the broad trading
range that the Markets have been trading in recent past.
Overall, the behaviour of the Markets post opening around
7700 would be critical. There are chances that the Markets find some resistance
near these levels and see some intermittent bouts of profit taking. However,
stock specific action would continue and volatility would stay. It is advised
to limit fresh purchases while continuing to protect profits at higher levels.
Overall, cautious outlook is continued to be advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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