Daily Market Trend Guide -- Thursday, July 23, 2015

MARKET REPORT                                                                                     July 23, 2015

The Markets displayed great amount of resilience yesterday as it not only saw a better than expected opening but also ended the day with decent gains. The Markets saw much stable opening amid global weakness and formed its intraday low of 8498.65 in the very early seconds of the trade. The Markets very soon crawled into the positive territory and witnessed a steady gradual up move throughout the session. The Markets saw itself in upward rising trajectory while it kept making fresh gradual highs and this trajectory sustained throughout the session. The Markets formed its intraday high of 8643.90 and finally settled the day at 8633.50, posting a decent gain of 104.05 points or 1.22% while still forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, JULY 23, 2015

The Markets are expected to open on a flat to mildly positive note and look for directions. As suggested by F&O data, the Markets are likely to continue with their up move but at the same time, it is important to note that the Markets still continue to trade within the channel and is currently trading below its  rising t rend line. Even with the Markets continuing to inch up, the rising trend line too would be rising which would keep the Markets within that rising channel.

For today, the levels of 8670 and 8720 will act as immediate resistance levels for the day. The supports come in at 8570 and 8530 levels.

The RSI—Relative Strength Index on the Daily Chart is 63.9005 and it does not show any failure swings. However, the NIFTY has made a fresh 14-period high but RSI has not this cause Bearish Divergence. The Daily MACD continues to trade above its signal line which is bullish. On the Candles, the Charts show some possibility of consolidation returning to the Markets as it shows an engulfing bullish pattern which is a sign of possible consolidation during an up move.

On the derivative front, the NIFTY July futures have added over 7.24 lakh shares or 3.50% in Open Interest. This is a positive figures which suggests addition of fresh longs in the system.

Coming to pattern analysis, the Markets have continued to remain in the upward rising channel drawn from its lows of 8000. The Markets presently trade below the upper rising trend line even after yesterday’s rise and this keeps the possibilities open for a consolidation from higher levels. As mentioned in our yesterday’s edition of Daily Market Trend Guide, this trend line is not major but it is important enough to cause consolidation in the Markets in the immediate short term which is what exactly is happening. Further, with the trend line rising, the breakout levels too rise with each passing of day which keeps the Markets away from breaking out even with the advances.

Overall, F&O data suggests possible continuation of the up move in the Markets. However, with the Markets still within the channel mentioned above, possibilities of profit taking bouts or consolidation cannot be ruled out from higher levels. Given this scenario, it is advised to keep the purchases very limited and selective while vigilantly protecting profits at higher levels.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com