MARKET TREND FOR THURSDAY, JULY 07, 2016
The Markets took a breather after six-day
rally and ended the day with modest gains after a range bound but volatile
trade. The Markets are expected to open on a flat note today and look for
directions. Though the Global Markets remain positive, we are likely to see a
flat opening as we would adjust with yesterday’s trade when we had a trading
holiday. However, in case, consolidation is likely to continue in the Markets
and it would continue to give health to the current rally as well.
Today, the levels of 8380 and 8400 will act
as immediate resistance for the Markets. The supports come in at 8320 and 8275
levels.
The RSI—Relative Strength Index on the
Daily Chart is 62.0939 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD remains bullish as it trades
above its signal line.
On the derivative front, the NIFTY July
futures have shed over 1.51 lakh shares or 0.79% in Open Interest. There was
bit of long unwinding / profit taking witnessed today. The NIFTY PCR remains
unchanged at 1.04.
Coming to pattern analysis, after returning
back into the rising channel drawn from February lows, the Markets achieved a
breakout moving past its immediate past top of 8295 levels. The Markets not
only recovered more than it lost on June 24th but also went on to give a
breakout on the upside as well. After six days of gains, and moving up nearly
400-odd points in previous seven sessions, the Markets took a breather yesterday
and showed first signs of consolidation on Daily Charts. The Markets are well
within its rising channel and today as well, if it continues to consolidate, it
would be healthy for the Markets in the long run.
This keeps our analysis on similar lines
today as well. The Markets will trade in a capped range and are also expected
to remain volatile to some extent. The Markets, though some extent of volatility is expected
to remain ingrained in it, will continue to see some sectoral out performance
today as well. It is advised to continue to use corrective dips to make
selective purchases. All and all, cautious optimism 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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