MARKET REPORT July
23, 2014
The Markets inched up for the sixth day in a row and end the
days yesterday with decent gains and also attempted to break out of the trading
range. The Markets saw a modestly positive opening following stable global trend
and traded in a capped range in the initial trade. The first half of the
trading saw the Markets maintaining its levels above of 7700 and it continued
to trade sideways while maintaining those levels. The Markets lost some ground
in second half of the session but saw the strength returning in the final hour
and half of the trade. The Markets went on to post the day’s high of 7773.85 and finally ended the day at
7767.85, posting a net gain of 83.65 points or 1.09% while forming a higher top
and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
As evident from the Daily Chart, the Markets have attempted
a breakout once again above 7700 levels. Today as well, we are set to see a
positive opening and the Markets are likely to continue with its up move in the
initial trade. Today’s opening would take the Markets near to 7809 level, which
it its previous top. It would be critical to see the behaviour of the Markets
as against that level.
For today, the levels of 7809-7820 would act as immediate
resistance. The supports would exist at 7700 and 7620 levels.
The RSI—Relative Strength Index on the Daily Chart is
64.0237 and it is neutral as it shows no bullish or bearish divergences or any
failure swings. The Daily MACD has reported a positive crossover and it now
trades above its signal line and is bullish.
On the derivative front, the NIFTY July futures have added
over 13.89 lakh shares or 9.26% in Open Interest. This is a clear indication
that fresh longs have been created in yesterday’s session and there had been
clear consensus while being on the upside.
Going by the pattern analysis, as evident from the Daily
Charts, the Markets have attempted to break out on the upside from its broad
trading range of 7500-7710 and today it is likely to continue its up move in
the initial trade. However, the Markets will now face resistance against its
immediate previous top of 7809 levels. It would be critically important to see
whether the Markets moves past this level or facing some profit taking.
Intraday trajectory of the Markets would be critically important as well.
All and all, we are set to see buoyant opening today and the
Markets are likely to test its previous top of 7809 levels. However, given this
fact, we continue to once again sound caution as it is likely that the Markets
faces a bout of profit taking near its previous highs. Select stocks shall
clearly outperform but it is extremely and critically important that we
continue to protect profits at higher levels. Overall, cautious optimism is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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