MARKET TREND FOR TODAY
The Markets yesterday snapped its 6-day losing streak as it ended the day with decent gains. Though the day did not remained convincing as the Markets lacked conviction, but it managed to maintain its opening gain after recovering some of the pared gains and in the process have formed a higher top and sharply higher bottom on the Daily High Low Charts.
Today, we are expected to see stark difference from the Western Markets and the resilience from the Asian Peers. The Markets in US and Europe have closed very weak but we are expected to see resilience from its Asian Peers. Today, we can fairly expect the Markets to open on a subdued and mildly negative note and look for directions post opening and the intraday trajectory that it forms would be critically important. For today, the levels of 5150 and 5120 shall act as supports and the levels of 5200 and 5245 are expected to act as resistance on the upper side.
The RSI—Relative Strength Index on the Daily Chart is 326745 and is neutral as it shows no negative divergence or failure swing. It has moved out of its OVERSOLD zone and has thus given a BUY signal. The Daily MACD continues to trade below its signal line.
At this point, some important points need to be considered.
First of all technicals. The Markets are technically better poised to offer all kind of possible resilience to the weakness as technical indicators are Oversold. Secondly, the turmoil in Western Markets have proved to be a disguised advantages as FIIs have remained net buyers in both Cash as well as Derivative segments. Also, the asset quality in Emerging Markets, especially countries like India are proving to be far better than the western counterparts.
All and all, we will continue to see resilience from the domestic markets to western weakness. However, as advised, until stability returns, it is advised to continue to maintain liquidity to protect positions while strictly avoiding shorts. Cautiously positive outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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