Tuesday, May 3, 2011

Daily Market Trend Guide -- Tuesday, May 03, 2011

MARKET TREND FOR TODAY


The Markets yesterday, as mentioned, failed to capitalize on positive opening and positive cues as tentativeness weighed high and the Markets closed with losses in yet another session forming a lower top and lower bottom on the Daily High Low Charts.

Today’s session would be an all important session for the Markets that would not only decide today's trend but could well affect the trend in the short term.

All eyes and reaction would be on the RBI’s Monetary policy announcements today. For today, expect the Markets to open on a flat to mildly negative note and look for directions. Formation of positive rising intraday trajectory would be essential for the Markets to avoid any further weakness. For today, the levels of 5740 and 5775 shall act as resistance and the levels of 5680 and 5645 shall act as supports. The RSI—Relative Strength Index on the Daily Chart is 45.0400 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any negative divergence today. The Daily MACD continues to trade below its signal line and is not in overbought or oversold range.

Today, overall expectations are of 25 bps rate hike in both repo as well as reverse repo rates which some believing it to be 50 bps. The CRR and SLR are expected to remain untouched. The Markets have shown massive addition of short positions with adding of massive Open Interest and falling of premium in last 2-3 sessions. Also, at Close, it has taken support at its 100-DMA.

All and all, even with weaker opening and some weakness persisting in the early session, it is again very strongly advised to refrain from creating any shorts. There are  bright chances that Markets may react violently to RBI’s announcements but some improvement is form for technical rebound cannot be ruled out.. Stock specific approach with positive caution is advised for today.

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

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.