MARKET TREND FOR TODAY January 20, 2012
The Markets yesterday opened on a positive note and maintained its gains throughout the day as it extended its up move by ending with decent gains. The Markets opened positive and strong and maintained its gain by spending the session bit volatile in 30—odd point range. It kept moving in this capped range, gave its intraday high of 5023.80 and ended the day at 5018.40, posting a decent rise of 62.60 points or 1.26%. In the process, the Markets have formed a sharply higher top and higher bottom on the Daily High Low Charts.
For today, the technicals point towards continuation of this up move, at least in the initial session. The Markets are expected to open on a positive note and continue with its up move. The Markets shall open positive and the intraday trajectory, like yesterday, along with the volumes would be critically important to determine that the Markets continues with its up move or consolidate or see some profit taking after opening higher.
For today, the levels of 5052 and 5075 are expected to act as resistance and the levels of 4980 and 4930 levels. With the Markets rising, the gap between probable resistances and supports have widened a bit due to continuation of up move.
The technical reading and the F&O statistics present a mixed picture. The RSI—Relative Strength Index on the Daily Chart is 66.7756 and it has reached its highest value in last 14-days which is bullish. It does not show any negative / positive divergence. The Daily MACD is bullish as it continues to trade above its signal line. On the Candles, A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles--this makes the current rising window even more bullish.
Having said this, the NIFTY Futures in total have reported shedding of 11 lakh shares in Open Interest. This translates into the reading that the Markets may open higher, spend some time in the gains but are remotely likely that it sees either consolidation from higher levels, or sees some profit taking. This may keep the markets in a range and also bit volatile. It is advised that aggressive longs should be restrained and any existing profits should be vigilantly protected. Stock specific activities may continued to be seen. Overall, neutrally cautious outlook is advised for the day.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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