MARKET TREND FOR THURSDAY, JULY 28, 2016
The Markets continued to heavily consolidate and ended the
day with modest gains after coming off nearly 80-odd points from the high point
of the day. Today, we are likely to see a flat opening again and the session
will remain dominated heavily with rollovers as we enter the expiry of the
current derivative series. The resistance zone of 8640-8660 continue to remain
sacrosanct for the immediate short term.
For today, the levels of 8640 and 8660 will continue to act
as immediate resistance levels for the Markets. The supports come in lower at
8590 and 8550 levels.
The RSI—Relative Strength Index on the Daily Chart is
66.6632 and it remains neutral as it shows no bullish or bearish divergence or
any failure swing. The Daily MACD stays bullish as it trades above its signal
line. However, this is moving towards reporting a possible negative crossover.
On the derivatives front, the NIFTY saw nearly 51% of
rollovers taking place. The NIFTY July series shed over 27.58 lakh shares or
13.51% in Open Interest. The August series added over 47.57 lakh shares in Open
Interest. The NIFTY PCR stands 1.07, unchanged from its previous levels.
Coming to pattern analysis, as mentioned in our previous
edition, the Markets have so far failed to confirm a breakout on the upside
post 8600 levels and there has been no confirming consistent up move. Having
said this, it becomes important to reiterate that the Markets have been showing
signs of fatigue on Daily Charts and despite the fact that the internals remain
buoyant,, some amount of minor correction cannot be ruled out at higher levels.
Presently, the Markets continue to remain in the broad rising channel drawn
from February lows.
All and all, today being expiry of current series, the
session is likely to remain heavily dominated with rollovers. Also, with the
signs of fatigue showing up on daily charts, any up move will continue to
remain vulnerable for a sharp intermittent selling bouts just like yesterday. We
continue to reiterate to use all possible up moves in protecting profits and
existing positions and keep fresh purchases highly selective and limited.
Overall, cautious outlook is advised for 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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