Daily Market Trend Guide -- Thursday, July 30, 2015

MARKET REPORT                                                                                July 30, 2015

The Markets had a day of positive consolidation amidst lower volumes as it ended the day with modest gains after a range bound session. The Markets saw a better than expected positive opening but spent the first half of the session in a very narrow 20-odd points range heading nowhere. It was in the second half that the Markets saw some more strength coming in as it surged and formed its day’s high of 8381.50. The Markets soon pared this gain and traded in a directionless trajectory with modest gains. The last hour of the trade once again saw some strength and the Markets finally ended the day at 8375.05, posting a modest gain of 38.05 points or 0.46% while forming a lower top but higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, JULY 30, 2015

Markets continue to pose itself at a critical juncture. Expect the Markets to open on a modestly positive note and look for directions. Most likely, the Markets will continue with their recovery initiated in the last hour of the trade yesterday. The positive sentiment would be aided by slightly improved technical factors and also good global cues which are aided by the Fed Reserve keeping the rates expectedly unchanged.

For today, the levels of 8400-8420 range, which is the 100 and 200DMA for the Markets, will act as immediate resistance. The supports would come in at 50-DMA at 8340 and then at 8300 levels.

The RSI—Relative Strength Index on the Daily Chart is 46.1240 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, rollovers dominated the session as NIFTY July Futures shed over 33.77 lakh shares or 22.72% in Open Interest while the August series added over 29.88 lakh shares or 31.04% in Open Interest.

Going by pattern analysis, the Markets have managed to keep its head above its 50-DMA at Close levels and today as well, it is expected to continue to do so. Further to this, on the way up, it is likely to encounter resistance at 100 and 200-DMA levels which are almost converging. It would be out of immediate danger if it manages to move past these two levels. Until this happens, it would continue to consolidate with the levels of 100 and 200DMA acting as immediate resistance the level of 50-DMA acting as immediate support. Any breach, as mentioned in our yesterday’s edition will induce some short term weakness.

All and all, the Markets are likely to remain dominated with rollover activities as we enter the expiry day of the current series. This will not only keep the Markets range bound but also leave it vulnerable to some spikes on either side as well with some amount of volatility ingrained in it. It is advised to keep the exposure limited and resort to purchases on highly selective basis. Cautious optimism is advised for today.

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:
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+91-98250-16331
milan.vaishnav@equityresearch.asia
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