MARKET TREND FOR TUESDAY, JULY 12,
2016
The Markets staged a very sharp up move
yesterday tracking stable and strong Global Markets and favorable technicals
while it ended the day with robust gains after a brief consolidation over
couple of days. Today, speaking purely on technical grounds, the Markets are
likely to continue with its up move, at least in the initial trade. Today, we
can fairly expect the Markets to open on a modestly positive note and continue
with its up move in the initial trade. However, thereafter, given the very
sharp rise, the Markets may again consolidate a bit at higher levels.
For today, the levels of 8480 and 8515 are
immediate resistance levels for today. The supports come in at 8420 and 8380
levels.
The RSI—Relative Strength Index on the
Daily Chart is 68.4194 and it has reached its highest value in last 14-days
which is bullish. It does not show any bullish or bearish divergence. The Daily
MACD is bullish as it trades above its signal line. On the Candles, a rising window has occurred. This
usually applies continuation of bullish trend.
On derivative front, the NIFTY July futures
have over 16.78 lakh shares or 9.19% in Open Interest. This shows creation of
fresh long positions and likely continuance of uptrend.
Coming to pattern analysis, the Markets
showed a throwback to its breakout levels of 8295 zone after the initial
breakout and while it consolidated for couple of days it has resumed its up
move again and in the process moved past its previous high of 8398-8400 levels.
Having said this, this very clearly implies that the inherent strength of the
Markets remains intact and they continue to remain in overall up trend.
However, given the sharp up move with gap yesterday, even if the Markets
continue to show strength, some amount of minor consolidation again at higher
levels cannot be ruled out. However, the Markets are likely to continue towards
its logical targets of 8550-8600 levels.
Overall, it is more than evident that the
Markets are currently in its upper rising channel with continuing up trend. However,
given the sharp moves, it may show some minor consolidation again at higher
levels even if it continues to edge higher. Also, some sector rotation would be
seen this week and we will see some defensive sectors leading the Market
performance and showing relative out performance. Overall, with inherent
strength intact, positive 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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