MARKET REPORT July
02, 2014
The Markets spent the entire session in consolidation
yesterday as it opened on a positive note and traded in a very narrow and
capped range to end the day with modest gains. The Markets opened positive and
after trading in a range in the morning trade, crawled up further by afternoon
to post the day’s high of 7649.50. After once a gain trading within limited
range, it saw sharp paring of gains from day’s higher levels. Though this
paring of gains was within the limited 25-odd points that the Markets traded in
the entire session and no levels were breached. It saw some minor recovery
coming in again in the last hour of the trade. The Markets finally ended the
day at 7634.70, posting a modest gain of 23.35 points or 0.31% while forming a
higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today would be a crucial session for the Markets. The
Markets are slated to open on a decently positive note and look for directions.
If the Markets open positive as expected, it would open near its all time high
immediate top of 7700 levels and its behaviour vis-à-vis the levels of 7700
would be crucial. The Markets might attempt to move past those levels but at
the same time the correction setting in after a positive opening near the
resistance levels too cannot be ruled out as the indicators throw contradictory
readings.
The levels of 7700 would act as immediate resistance level
for the Markets. The supports come in much lower at 7575 and 7510 levels.
The RSI—Relative Strength
Index on the Daily Chart is 63.6290 and it is neutral as it shows no bullish or
bearish divergence or any kind of failure swings. The Daily MACD still
continues to remain bearish as it trades below its signal line.
On the derivative front, NIFTY July futures have shed over
3.71 lakh shares or 2.65% in open interest. This clearly signifies that selling
/ offloading in futures have been seen in yesterday’s session.
Going by the pattern analysis, it is clearly evident on the
Daily Chart that the Markets have spent last couple of sessions in broad
trading range of 200-odd points with the levels of 7500-7510 acting as bottom
and the levels of 7700 which have become immediate top for the Markets. The
Markets may open positive today but are likely to find resistance near the
upper band of the Markets.
Overall, going by the F&O data inputs and the structure
of the Daily Chart, the Markets will open higher today but there would be equal
amount of chance that some correction or some mild spate of profit taking
creeps in from higher levels. It is advised to stick vehemently to defensives
and avoid high beta stocks while making purchases and continue to protect
profits at higher levels. Moderate exposures and caution are advised or today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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