MARKET TREND FOR MONDAY, JULY 18,
2016
The Markets consolidated on Friday after it
retraced from the opening highs of the day to end the day with mild losses
while remaining in range bound trajectory. Today’s analysis continues to remain
on similar lines. The Markets are expected to see a quiet to positive opening
and it is very much likely to see itself consolidating in a capped range while
continuing to display inherent strength and buoyancy. It is likely to test its
upper rising trend line resistance and it is also likely that the Markets
continue to face corrective pressure at higher levels.
The levels of 8590 and 8625 will act as
immediate resistance levels for today. The supports come in at 8510 and 8475
levels.
The RSI—Relative strength Index on the
Daily Chart is 69.8871 and it has just crossed below a topping formation. It
does not show any bullish or bearish divergence or failure swings. The Daily
MACD stays bullish as it trades above its signal line.
On the derivative front, the NIFTY July
futures have further added over 4.58 lakh shares or 2.08% in Open Interest. The
NIFTY PCR stands at 1.06 as against 108 on Friday.
Coming to pattern analysis, the Markets
have been displaying great amount of strength post its breakout from 8295
levels. After each rise, what we have been witnessing are just intraday
corrective bouts and a range bound consolidation. The Markets continues to
remain in a upward rising channel drawn from the February lows and it is
expected that if the Markets continue to keep tracking its upward rising trend
line, then the logical targets of 8600-8625 cannot be ruled out. However, at
any given point of time, the Markets will continue to remain vulnerable to intraday
selling bouts or ranged consolidation at higher levels.
Overall, the Markets have been driven by a
tactical shift towards equity following sharp decline in bond yields abroad.
Given the technical structure of the Charts, the Markets continue to remain
vulnerable to selling bouts at higher levels but it continues to remain inherently
strong and buoyant. Any decline should be used to make quality purchases. Sector
specific out performance shall continue. Shorts should be avoided and cautious
optimism is advised or today.
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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