Also, we had mentioned about the correction / consolidation which seems imminent. Keeping this in view and as expected, the Markets have spent the entire session in consolidation today with the secoral indices ended showed mixed trend as the Markets spent a totally directionless session.
The other sign of impending consolication / correction is that the Markets have formed a lower top today, with the levels of 5872 acting as temporary top. Further to this, the volumes remained lower as expected and the lead indicators are showing the signs of weariness.
Also, as mentioned in our yesterday`s edition, the 100 DMA of the Markets is falling to cut 200 DMA from above, which gives negative crossover of averages.
Given this reading, fresh longs can be initiated ONLY when the NIFTY breaches the 5925 levels on the upside. Until this happens, the Markets shall continue to consolidate and correct which is long overdue and would be healthy and in overall interest of the Markets.
Until this, the longs should be protected at higher levels. WATCH THIS space Monday morning for detailed Daily Market Trend Guide.
"..........................The Markets continued to form a higher top and higher bottom on the Daily High Low charts as it continued its up move for the eighth day in a row to close with gains.
For today, expect the Market to open on a flat to mildly negative note and look for directions. Today’s trend in the Markets would depend largely upon the intraday trajectory the Markets form during the day.
With the Markets expected to open on a flat to mildly negative note, the levels of 5872 and 5910 shall act as resistance and the levels of 5775 and 5665 shall act as supports on the lower side.
All lead indicators continue to remain in place but are on the verge of getting OVERSOLD. The RSI—Relative Strength Index on the Daily Chart is 68.3281 and is nearing its topping out range. It continues to remain Bullish as it has reached its highest value in last 14-days. The Daily MACD continues to trade above its signal line.
Having said this, we have been maintaining in our last two editions of Daily Market Trend Guide that the Markets have risen in an unhealthy and unsustainable manner and needs some consolidation / correction from these levels.
We would again like to point our that the Markets did come off its highs yesterday as expected but saw some short covering again due to rollover activities. HOWEVER, the seeds of impending weakness were started being seen as BANKNIFTY Closed with losses and the broader markets (Midcaps) closed flat. It is all likely that even with some moderately positive opening, the Markets may convert itself in negative falling channel and some correction / consolidation may be seen. It is again strongly advised to exit shorts at these higher levels to protect profits. Investors are advised to refrain from taking long positions at these levels. The policy of cautious approach with expectation of correction setting in is advised for today......"
Consulting Technical Analyst,