MARKET TREND FOR WEDNESDAY, JULY 13,
2016
The Markets traded pretty much on analyzed
lines yesterday, did show some intraday corrective bout but finally ended the
day with gains after pulling back in the second half. Today as well, we
continue to set our analysis on similar lines. We can fairly expect the Markets
to open on a flat to mildly positive note and look for directions. However,
Markets has been showing some signs of weariness and it vulnerability to
selling bouts from higher levels cannot be ruled out.
For today, the levels of 8530 and 8575 will
act as immediate resistance levels for the Markets. The supports come in at
8480 and 8415 levels.
The RSI—Relative Strength Index on the
Daily Chart is 70.6776 and it now trades in overbought territory. However, 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 Candles a rising window occurred again. This
usually implies continuation of bullish trend. There have been 10 rising
windows in the last 50 Candles which portrays overall strong picture.
On the derivative front, the NIFTY July
futures have added yet another over 13.13 lakh shares or 6.58% in Open
Interest. This continues to display inherently bullish picture of the Markets.
Coming to pattern analysis front, as
repeated often in our previous editions, the Markets have not only recovered
all of its losses from the lows it made on June 24th but have went
on to post a breakout while moving past its previous top. It has attempted a
further breakout as a continuation of its uptrend after it consolidated for a
couple of days. The uptrend is likely to continue today as well however the
Markets have been showing some signs of weariness at higher levels.
Overall, it is important to note that the
Markets are now overbought and the breadth has been little negative showing
some signs of weariness. Also, it has reason over 250-odd points after breaking
out from its previous top. All this point towards some vulnerability of the Markets towards
witnessing some profit taking bouts from higher levels. Since the undercurrent
remains adamantly buoyant, such corrections / consolidation may remain very
range bound we may not witness any significant damage. However, no every rise
should be utilized more on protecting profits at higher levels. The defensives
sectors and the laggards over previous week will continue to outperform.
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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