Friday, July 29, 2016

Daily Market Trend Guide -- Friday, July 29, 2016

MARKET TREND FOR FRIDAY, JULY 29, 2016
The Markets had a buoyant end to the July series while it ended yet another day with gain fuelled global liquidity and positive sentiments. Today as well, as the country inches very near to GST becoming a reality, the Markets may open on a flat to mildly positive note and look for directions. Though the technicals clearly suggest that the Markets may consolidate at  higher levels, immediate major downsides remain limited and the domestic factors are likely to provide positive cues to the markets.

For today, the levels of 8675 and 8720 will act as immediate resistance levels for the Markets. The supports come in at 8610 and 8565 levels.

The RSI—Relative Strength Index on the Daily Chart is  69.28 and it inches near to its overbought territory. The RSI does not show any failure swing but while NIFTY has formed a fresh 14-period high for the Markets, the RSI has not done so and this has resulted in Bearish Divergence on Daily Charts. The Daily MACD stays bullish as it trades above its signal line.

On the derivatives front, the NIFTY August series have added in net open interest. The NIFTY PCR has begun with 1.24 as compared to 1.08 and this remains bit on the higher side.
While having a look at the pattern analysis, the Markets have continued to remain in the upward rising channel and have been continuing to track the upper rising line of the said channel drawn from February lows. Having said this, it is much evident from the overall structure of the Charts that the Markets are being fuelled explicitly by the gush of global liquidity and while it continues to inch upwards, the corrections have been mainly in form of intraday dips or range bound consolidation. However, having said this, this very structure of the Markets continue to it itself vulnerable to intermittent bouts from higher levels.

Overall, the lead indicators persistently suggest signs of fatigue at higher levels. However, the Markets may not correct much and the corrections may remain limited to range bound consolidations and intermittent profit taking bound. It would be important to note that the Markets will continue to remain exposed to intraday volatility and out performance will remain limited to specific stocks. While keeping purchases limited and guarding profits at higher levels, cautious outlook is advised for the day.


Milan Vaishnav, CMT
Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331

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