MARKET TREND FOR TODAY
The Markets had an disappointing session on Friday, and also a disappointing week as it ended the day as well as week with net losses which had just three trading days amid global uncertainties and in the process have formed a lower top and lower bottom on the Daily High Low Charts.
Following overnight developments in the Europe, the Markets are likely to see a strong opening today. We can fairly expect to see strong opening in the Markets and the Markets are expected to trade strong, at least in the initial trade.
Technically speaking, the Markets have closed below its 100 DMA on the Daily Charts but is just within its filter. Further, the European Markets have see big recovery from its intraday lows on Friday and the US Markets have given good strong close and all this is expected to aid in stronger opening today. For today, the levels of 5220 and 5255 are likely to act as resistance and the levels of 5140 and 5110 are likely to act as supports.
The RSI—Relative Strength Index on the Daily Chart is 51.0254 and has reached its lowest value in last 14-days which is bearish. RSI has set a new 14-period low whereas NIFTY has not and this is bearish divergence. Also the MACD has turned negative as it has reported a negative crossover and trades below its signal line.
However, on the Weekly Charts, RSI is 47.71.70 and its neutral without any negative divergence or failure swing. The MACD continues to remain bullish trading above its signal line.
Having said this, strong positive opening can certainly be expected but at the same time, it would be critically important for the Markets to remain in positive trajectory in order to capitalize on its positive opening. NIFTY has reported shedding of Opening Interest and this needs to be replaced with fresh buying.
All and all, intraday trajectory would be critical to see if Markets is able to capitalize on stronger opening today. With overall technicals and lead indicators in place, it is advised to refrain from shorting and stock specific positions may be taken, Overall, cautious optimism is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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