Daily Market Trend Guide -- Tuesday, July 28, 2015

MARKET REPORT                                                                                           July 28, 2015

The Markets took an extremely bearish overturn yesterday following global weakness and ended the day with a sharp cut. The Markets saw lower opening following global weakness and after opening on weaker than expected note; it took further cuts as the day progressed. In the morning session, the Markets continued to trade sideways with opening losses and showed absolutely no signs or intentions to recover. Weakness increased in the second half of the session when the Markets kept making fresh gradual lows. It went on to touch and breach both of its DMAs, i.e. 100 and 200 DMA and formed the day’s low at 8351.55. Again, with no recovery coming in, the Markets ended the day at 8361, posting a sharp cut of 160.55 points or 1.88% forming a sharply lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, JULY 28, 2015

Expect the Markets to open today on a stable note and look for directions. There are fair chances that the Markets arrest its downsides, stabilize and even attempt a pullback. However, the Markets fell out yesterday from its channel and while pulling back the trend line support which it  breached might act as short term resistance for the Markets. Overall, the Markets have slightly placed itself in little precarious position.

For today, the levels of 8415 and 8460 might act as immediate resistance for the Markets. 

The supports come in at 8340 and 8300 levels.

The RSI—Relative Strength Index on the Daily Chart is 44.7672 and it has reached its lowest value in last 14-days which is bearish. Further, RSI has set a fresh 14-period low but NIFTY has not yet and this is bearish divergence. The Daily MACD has reported a negative crossover and is now bearish as it trades below its signal line.

On the derivative front, NIFTY July futures have shed over 20.06 lakh shares or 10.05% in Open Interest. The August series added over 21.07 lakh shares or 69.60% in Open Interest, adding net of 74,ooo shares. Rollovers in NIFTY stood at 22%.

Coming to pattern analysis, the Markets have fallen out of the small rising channel that it had formed. Because of this, the trend line support it breached yesterday will not act as its immediate short term resistance. Further, the Markets also breached its 100-DMA and 200-DMA and have closed below it. However, it remains within its filter and there are chances that it still continues to take support around these levels.

Overall, though the Markets are expected to open on a quiet note and expected to take some stability, it is likely to continue to remain volatile as it will struggle with the all important support levels at Close. Further, with the rollovers, it will also keep the Markets dominated with rollovers activities. Though some range bound movement and intermittent volatility may be seen, overall, any dip should be utilized to pick selective stocks. Neutral to cautiously positive outlook 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

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