Daily Market Trend Guide -- Wednesday, June 24, 2015

MARKET REPORT                                                                                June 24, 2015

The Markets continued to gain for the eighth day in a row as they ended the day with minor gains after a range bound trade. The Markets saw a flat opening and soon dipped into the negative territory to form the day’s low of 8334.95. However, within minutes, it soon crawled back into the positive territory after remaining negative for a very brief period. It soon went on to form the day’s high of 83.98.45 in the late morning trade. It was in the early afternoon trade that the Markets came off from its highs again to trade flat. Thereafter, it did recover and spent the remaining part of the session moving in a very range bound manner. It finally ended the day at 8381.55, posting a net gain of 28.45 points or 0.34% while forming a higher top and higher bottom on the Daily Bar Chart.

MARKET TREND FOR WEDNESDAY, JUNE 24, 2015

 Today, we enter into penultimate day of the expiry of current derivative series and therefore we can expect the session to remain dominated with rollover centric activities. The Markets may open on a flat to mildly positive note and look for directions. Yesterday it has kept hovering around their 200-DMA level which is 8364.  In event of the Markets moving past this level, this will become support in the near term.

The levels of 8410 and 8475 are immediate resistance levels for the Markets today. The supports come in at 8364 and 8291-8310 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.9979 and it has reached its highest value in last 14-days which is bullish. Though, it does not show any bullish or bearish divergence. The Daly MACD remains bullish as it trades above its signal line.

On the derivative front, rollovers continued as the NIFTY June futures shed over 11.23 lakh shares or 8.69% in Open Interest. The July futures added over 20.03 lakh shares or 47.14% in open interest. The NIFTY PCR rose to 1.17 as against 1.14 on the previous day.

Coming to pattern analysis, the Markets have attempted to form a bottom by taking a support on the double bottom support levels at 7950-8000 range. It has then pulled back and has moved past its 50-DMA and 200-DMA. The Markets have managed to show strong possibility of confirming its bottom as it moved past  the falling trend line resistance as well as it 50-DMA but it still trades within the filter of its 200-DMA. If it moves past this level, this level would become its support. In event of any temporary weakness, it is likely to consolidate between its 50-DMA and 200-DMA levels.

All and all, the Markets have continued to inch up but at the same time, it is likely that it sees some profit booking at higher levels and might consolidate in a given range before it resumes its up move. Further, the pending rollovers might induce some ranged trade or even some volatility at some point of time. Though the Markets have shown strong signs of confirming its bottom, it is advised to adopt vigilant approach at higher levels.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

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