Wednesday, March 30, 2011

Daily Market Trend Guide -- Wednesday, March 30, 2011

MARKET TREND FOR TODAY

The Markets continued its rise for the sixth session in a row to close yet again with decent gain and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts. Following stable Asian Markets and positive Close in the US, we are expected to open on a positive note and trade in the positive at least in the initial trade with all possible chances that it consolidates later in the session.However, even if the Markets opens and trade in the positive, there are fair chances that the Markets may see some correction / consolidation which is long overdue. For today, the levels of 5775 and 5800 shall act as resistance and the levels of 5680 and 5615 shall act as supports on the downside.
The RSI—Relative Strength Index on the Daily Chart is 64.1783 and it has reached the highest value in last 14 days which is Bullish. However, it does not show any negative divergence. The Daily MACD continues to trade above its signal line.

At this juncture, it becomes very important to note that the NIFTY has risen almost 380 points and the Sensex almost 1600 points in six straight sessions. During this rise, it has totally disregarded key pattern resistances, and its 200-DMA and 100-DMA and thus, this gets unsustainable in the long run and some correction becomes imminent and long overdue in such case, which would be in fact healthier for the Markets. Also, since the Indian Markets have completely outperformed its Asian Peers, there are all chances that it consolidates and corrects even when the Asian Markets trades strong. With the Markets coming off some 40-odd points yesterday, that levels becomes a minor temporary resistance. All and all, it is strongly advised not to get carried away with the unabated rise that the Markets are seeing as it now getting clearly dangerous at higher levels. Continuation of extreme caution is advised while taking long positions. Cautious outlook is advised for today. - Milan Vaishnav, Consulting Technical Analyst, MyMoneyPlant co in

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in 
+91-9825016331

milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

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