MARKET TREND FOR MONDAY, AUGUST 01, 2016
Markets took a breather on Friday from the up move that it
witnessed over previous week and ended the day with modest losses while it consolidated.
However, the Markets continued to display typically liquidity-fueled strength
and resilience and today, it is once
again expected to open on a higher note. The Markets may post fresh 52-week
highs today but at the same time, caution stands at elevated levels.
For today, the levels of 8670 and 8705 will act as immediate
resistance levels while the supports would come again lower at 8570 and 8535
levels.
The RSI—Relative Strength Index on the Daily Chart is
66.1996 and it is neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD continue to remain bullish as it trades above
its signal line.
On the derivative front, the NIFTY August futures have added
over3.23 lakh shares or 1.48% in Open Interest.
Coming to pattern analysis, the Markets have continued to
remain in the upward rising channel drawn from February lows. As mentioned
often, the Markets have successfully managed to remain in this upward rising
channel. It has been displaying good amount of resilience and strength as after
each up move, the Markets are showing a range bound consolidation and the
corrections have remain limited in the form of intermittent selling bouts and
flat endings at Close levels. However, it is also important to note that it has
been tracking the upper line of the channel and as mentioned often in our
previous editions, it is also continuing to display mild signs of fatigue at
higher levels.
Overall, though the Markets are expected to start positive,
the caution levels too stand at elevated levels. The Markets will continue display
strength and will also continue to see stock specific out performance but
continue to reiterate our view to use upsides more for protecting profits at
higher levels and keeping fresh purchases highly selective and extremely stock
specific. Overall, positive but cautious outlook is advised for the day.
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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