MARKET TREND FOR WEDNESDAY, JULY 20,
2016
Markets displayed great amount of
volatility and strength as well as it see-sawed nearly 100-odd points intraday
to finally end with modest gains. Today, Markets are expected to see a flat to
modestly positive opening and look for directions. It is most likely that the
Markets will continue to consolidate and some amount of volatility will
continue to remain ingrained and therefore, it keeps analysis for today once
again on similar lines like yesterday.
The levels of 8575 and 8625 will act as
immediate resistance levels for the Markets today. The supports come in at 8475
and 8430 levels.
The RSI—Relative Strength Index on the
Daily Chart is 67.4335 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD stays bullish as it continues
to trade above its signal line.
On the derivative front, the NIFTY July futures
have added over 5.19 lakh shares or
2.32% in Open Interest. The NIFTY PCR
stands at 1.03 as against 1.06 yesterday.
Coming to pattern analysis, the Markets
have been consolidating after it moved upwards post breaking out above 8295
levels. It has been seeing a range bound consolidation since last couple of
days but at the same time, the Markets have displayed good amount of resilience
at higher levels. The levels of 8600-8610 have now become a intermediate top
for the Markets and fresh rally would occur only after the Markets move past
these levels. Until this happens, we will see the Markets oscillating in a
capped range. However, the downsides would be limited as inherent strength
continues to remain intact.
Overall, the underlying buoyancy in the
Markets remains intact. The Markets may not see a runaway rally immediately but
the resilience will continue to show and the downsides would be limited. In
form of corrections, we might witness some limited downsides and volatile
intraday movements. While refraining from shorts all downsides should be
utilized to make selective purchases as sector rotation is much evident in the
Markets and stock specific out-performance will continue.
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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