Daily Market Trend Guide -- Wednesday, July 15, 2015

MARKET REPORT                                                                                       July 15, 2015

Markets remained expected in a range and consolidate with the levels of 100-DMA continuing to act as resistance at Close levels. The Markets saw a negative opening but it managed to recoup its morning losses which were modest and the Markets traded flat by late morning trade. However, the Markets weakened in the early afternoon trade to slip into negative territory and it formed intraday low of 8424.10. It was the second half of the session which saw the Markets attempting to surge from its lower levels. The Markets managed to recoup all of its losses to trade flat and it even further went on to form the day’s high of 8480.25. However, weakness crept in and the Markets once again saw paring of gains from higher levels. It saw itself oscillating in a range and finally settled the day at 8454.10, posting a minor loss of 5.55 points or 0.07% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, JULY 15, 2015

Today remains a critically important day for the Markets. The Markets have resisted at its 100-DMA yesterday but today, we can expect the Markets to open on a modestly positive note. This positive opening is likely to see them opening above its 100-DMA levels and continue afresh with its up move after a day of consolidation yesterday. However, it would be critically important for the Markets to trade above its 100-DMA levels in order to capitalize on positive opening.

For today, the levels of 8480 and 8525 are immediate resistance levels for the Markets. The supports exist at  8424 and 8390 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.4388 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY July futures have added over 2.11 lakh shares of 1.08% in Open Interest.

Coming to pattern analysis, the Markets have confirmed their bottom formation and are likely to now continue with its up move. With all global and domestic news flows in place, it is now likely to move past its 100-DMA levels as well and therefore trade above all of its three moving averages. Having said this, over coming days, the 50-DMA, which trades below the 100 and 200-DMA will also show improvement. It has already stopped falling and has started rising upward moderately. The Markets are all likely to come out of intermediate bearish trend and get back into consolidation mode once again. However, all this will hold true only if the Markets manages to keep its head above its 100-DMA levels.

All and all, the triggers are positive and going by the structure of the Chart read along with technical lead indicators, we are likely to see the Markets moving past its 100-DMA successfully. It is also more likely to sustain above that level and attempt to move past it also at Close. Modest purchases may be made and every dip should be used to make selective purchases. Still over exposure should be avoided and profits should be guarded 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

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