Thursday, April 7, 2011

Daily Market Trend Guide -- Thursday, April 07, 2011

MARKET TREND FOR TODAY


The Markets yesterday showed some first signs of correction slightly creeping in as it closed with minor losses but still managed to form a slightly higher top and higher bottom on the Daily High Low Charts.
The Markets have closed near the low point of the day and thus, it is likely that the weakness shall persist in the Markets, at least in the initial session.

The Markets are likely to give a flat to mildly negative opening today and look for directions. Today’s behavior of the Markets would be critical to confirm the Markets entering into consolidation / correction stage as today’s session may see negative crossover of 100 and 200 DMAs which are now equal.

With the markets expected to open on a flat to mildly negative note, the levels of 5925, 5940 shall act as resistance and the levels of 5845 and 5805 shall act as supports.

The RSI—Relative Strength Index on the Daily Charts is 69.2237. This lead indicators has moved out /down from its OVERBOUGHT area and has given a SELL signal. The Daily MACD continues to trade above its signal line.

Though the Markets have added in net Open Interest, the Open Interest has come down from its intraday highs and the premiums too shrunk intraday day. This translates into offloading of longs and also some creation of fresh shorts in the system. Today’s trend would largely dependupon the intraday trajectory that the Markets form. Even if initial positivity is seen in the Markets, the chart pattern as well as the other technicals suggest that the correction may continue in the Markets.

All and all, with the Markets likely to continue to remain in corrective phase, extreme caution is advised while taking fresh longs with highly stock specific approach. Overall, continuation of cautious outlook is advised for today.

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

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

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