MARKET TREND FOR TODAY
The Markets ended its seventh consecutive session in the red as it ended the Friday’s session with losses. Though it saw a very sharp and strong short covering from its day’s lows but still continued to form a lower top and lower bottom on the Daily High Low Charts.
For today, we can expect a subdued opening again in the Markets. Technically speaking, since the Markets have ended the day near the high point of the day of Friday post short covering, it is technically supposed to continue the up move and its recovery. But global weakness is all likely to weigh it down again and thus give a subdued opening in the Markets.
With such subdued opening expected, once again, like Friday, the intraday trajectory would continue to play critically dominant role in dictating the trend. For today, the levels of 4850 and 5820 shall continue to act as supports and the levels of 4940 and 4985 shall act as supports.
The RSI—Relative Strength Index on the Daily Charts is 35.1115 and it has reached its lowest value in last 14-days which is bearish. However, it does not show and negative / bearish divergence. The Daily MACD continues to trade below its signal line.
On the Weekly Charts, the RSI is 41.2853 and it shows no negative divergence or failure swing and is neutral. The Weekly MACD continues to remain positive as it trades above its signal line.
On the Candles on the Daily Charts, A long lower shadow occurred. This is typically a bullish signal if it occurs near low price level or a support level. Further to this, this is expiry week and the session will remain dominated with rollover centric activities. As said above, the Markets have lost 383.55 points of 7.48% in straight seven sessions. Given all this there are chances that we open negative but may see discomfort at lower levels. Spikes are expected in form of short covering. The volatility is likely to stay. Given all this, there are chances that one sees a short trap at lower levels. It is advised to continue to avoid aggressive positions, avoid shorts and adopt cautious, but mildly positive outlook for the day.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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