The Markets continued to consolidate yesterday also though it showed some intraday resilience but ended with and in the process have formed a sharply lower top and lower bottom on the Daily High Low Charts.
Today, expect the Markets to open on a mildly negative note and look for directions.
With the Markets expected to open on a mildly negative note, the levels of 5925-5935 have now become temporary top an they will continue to act as immediate resistances.
For today, the levels of 5925-5940 shall act as resistance and the levels of 5830 and 5790 shall act as supports. Yesterday, the Markets have shown some definite signs of impending weakness though it
has been best trying to avoid it.
The RSI—Relative Strength Index on the Daily Chart is 68.5841 and it has given a sell signal a day ago. It continues to remain neutral as no negative divergences or failure swings are seen. The Daily MACD continues to trade above its signal line.
As mentioned, the Markets now shows some definite signs of weariness and impending correction. On the Candles, A Spinning Top has occurred. During a rally, as in present case, it signifies the loss of price momentum. Further three black candles were formed in last three days. Though they were not big enough to create three black crows the steady downward pattern is bearish. Also, the Close of the NIFTY is below the Chart pattern resistance of falling trend line.
Given all this, the reading goes that even though the Markets show some intraday resilience, the steady pattern remains bearish. Fresh longs should be either very stock specific with strict protection of profits at higher levels or only when the Markets moves past the 5940 levels. Until then, stock specific approach with high degree of caution is advised for today.
Consulting Technical Analyst,