MARKET TREND FOR TODAY January 10, 2012
The Markets continued to consolidate yesterday as it opened on a negative note, dipped to give the day’s low of 4695.45 in the morning trade. The Markets, however, spent to rest of the session in the rising trajectory as it recovered all of its opening losses to give the day high of 4758.70 to trade briefly into the green. The Markets pared some of its gains to dip into negative, but recovered again to end the day at 4742.80, posting a nominal loss of 4.10 points of 0.9%. The Markets have ended the day almost flat for the fourth session in a row and in the process have formed a similar top and lower bottom on the Daily High Low Charts.
Technically speaking, since the Markets have ended the day near the high point of the day, it is expected to open on a mildly positive note and continue with its up move, at least in the initial trade. With the mildly positive opening expected, the Markets are still overall expected to continue to remain under consolidation.
Since the Markets are overall continue to still remain under consolidation, the reading and analysis too would remain more or less same. The intraday trajectory and the volumes would continue to play critical role and the levels of 4790-4800 would continue to act as immediate resistance. Until the Markets moves past these levels, no sustainable up move can be expected and the Markets are expected to remain in broad trading range between the two blue lines shown in the charts with 4550-4800 levels.
The RSI—Relative Strength Index on the Daily Chart is 47.8609 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade above its signal line and is bullish.
Having said this, since the Markets are consolidating near the upper end of its consolidating zone / trading range, the under current can be called buoyant. But even then, since the breakout is yet to occur, the downward side risk too can be more if one sees volatility or some profit taking. Due to this, we continue to advise to refrain from avoiding shorts and taking aggressive positions on either side, while vigilantly protecting profits on higher levels. Overall cautious optimism is continued to be advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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