Morning Dew - 31 July 2013

Key Points

• JCI edged higher on Tuesday as it gained 0.61%. Still, the upcoming one-week holiday is expected to sap volume out of the market and combined with lack of catalysts we are most likely see the index to fluctuate in a limited range. US stocks also ended mixed as the Dow slipped while the S&P 500 index went up slightly along with the NASDAQ.
• This week the FOMC will meet (starting on Wednesday) and while there isn't any policy changes expected from the meeting, the market would like to hear what the Fed will say in this meeting. FOMC is seen starting to start tapering out its stimulus in September, removing it completely next year and to start raising rates about a year afterwards. Nonfarm payrolls data this week will also provide some clues on how close we are to this scenario.
• There is no change in view from the technical stand point. JCI is seen supported at 4492-4495 while the key resistance is seen at 4779 (recent high). Failure to hold on to the support area will risk the index to fall deeper towards the crucial support at 4403. A bullish harami coupled with a rising volume is seen positive for the Wednesday session, but lack of positive catalysts may limit the upside potential.

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