MARKET TREND FOR TODAY January 6, 2012
The Markets continued to consolidate yesterday, very much on expected lines as it opened on a positive note, continued to trade in positive territory but in a capped range, pared its gains, and recovered to close virtually unchanged at 4749.95, posting a very negligible gain of 0.30 point or 0.01%. In the process, the Markets have formed a parallel bar on the Daily High Low Chart as they have continued to consolidate.
Today’s analysis is going to be no different than that of yesterday. For today, expect the Markets to open on a mildly negative note and would continue to look directions. Again, as it was yesterday, the intraday trajectory and the volumes would play the critical role in determining the trend for today as the Markets are currently into consolidation phase. Again like yesterday, the levels of 4800 would continue to act as temporary resistance and the Markets needs to move past that level for a fresh up move.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Charts is 48.4292 and is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to trade above its signal line and is therefore bullish. The levels of 4800 and 4830 shall as resistance today, and the levels of 4710 and 4680 are technical supports.
As mentioned in our yesterday’s edition of Daily Market Trend Guide, the Markets continue to remain in broad range indicated with two blue lines on the charts and will have to move past the levels of 4800 for a fresh up move. The NIFTY Futures have added 5.08 lakh shares in Open Interest. Though the Markets continue to consolidate, the undercurrent still remains buoyant.
All and all, it is advised to keep making selective purchases and continue to protect profits until the Markets move past 4800, but at the same time, shorts should be avoided. The consolidation phase may keep the markets volatile and range bound but the lead indicators and F&O statistics point towards mild buoyancy. Overall continuance of positive approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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