Daily Market Trend Guide -- Thursday, May 19, 2011

MARKET TREND FOR TODAY

The markets had an purposeless session yesterday as it ended the day with moderate losses after remaining in very narrow range throughout the session, though it has continued to form a lower top and lower bottom on the Daily High Low Charts.

For today, expect the Markets to open on a flat note and look for directions. Today’s analysis remains more or less in line with yesterday’s as the Markets are likely to show some resistance on the downside with an bias towards some short covering / pullback. With the Markets expected to open flat, the levels of 5445 and 5490 shall act as resistance and the levels of 5420 and 5390 shall act as supports.

The RSI—Relative Strength Index on the Daily Charts is 35.2444 and it shows no failure swings. Also, the Markets have set a new 14-day low but RSI has not and this is BULLISH DIVERGENCE. The Daily MACD continues to trade below its signal line.

The Markets have added Open Interest again, that too significantly on the short side in last couple of session. Also, as mentioned above the lead indicators show some technical resistance on the down side thus leaving fair chance of a short covering or a technical pullback. All and all, the markets will have to move past the levels of 5440-5445 in order to be in the broad range of 5440-5610 again to avoid getting weaker. With F&O data and lead indicators showing some support coming in, it is continued be advised to avoid shorts and maintain cautiously positive outlook for the day.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com