MARKET TREND FOR WEDNESDAY, JULY 27, 2016
Keeping perfectly in line with the analysis carried out
yesterday, the Markets did not continue with its attempted breakout and saw it
consolidating once again at higher levels. The Markets saw some pressure
returning from higher levels while it kept the resistance levels of 8650-8670 sacrosanct.
Today, once again, we will see the Markets opening on a flat note and levels of
8650 will continue to act as immediate resistance. Today we enter the
penultimate day of expiry of current derivative series and we will see the
trade remaining dominated with rollovers.
For today, the levels of 8650 and 8680 will act as immediate
resistance levels for the Markets. The supports come in much lower at 8520 and
8475 levels.
The RSI—Relative Strength Index on the Daily Chart is
65.2969 and it has just moved below its overbought territory. It stays neutral
showing no bullish or bearish divergence or any failure swings. The Daily MACD
continues to stay bullish as it trades above its signal line.
On the derivative front, the NIFTY July futures have shed
over 10.09 lakh shares or 4.71% in Open Interest. The August series saw addition
of over 61.66 lakh shares or 90.52% in Open
Interest as rollover picked up
pace. NIFTY saw nearly 41% of rollovers happening yesterday.
Coming to pattern analysis, the Markets did make an attempt
to break out above the 8600 levels following several days of consolidation.
However, as mentioned yesterday, the Markets had got overbought and had
demonstrated some signs of short term fatigue on the Daily Charts. The Markets
did make an attempt to continue with its up move, it saw some selling pressure
coming in from higher levels and it continued to consolidate after posting
modest losses.
Overall, though the Markets continue to remain in an overall
uptrend, it is likely that it continues to consolidate for couple of more day’s
time. The inherent trend continues to remain intact but the levels of 8650 will
be critical to watch out for. Any up moves should be best utilized to protect
profits on existing positions as all upsides will continue to remain vulnerable
to intermittent bouts of profit taking at higher levels.
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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