Friday, March 9, 2012

Daily Market Trend Guide -- Friday, March 09, 2012

MARKET TREND FOR TODAY                                                           March 9, 2012
The markets were closed yesterday on account of Holi and on Thursday, closed flat with nominal gains after a range bound and volatile day. The Markets on Wednesday opened on a negative note and after briefly trading into negative, managed to come back into the positive territory and gave its intraday high of 5243.85. The Markets traded into the green  for a very brief period in the early afternoon trade and then slipped into the negative territory again and went on to give the day’s low of 5171.45. However, in the last hour and half of trade, it saw some short covering as it recovered from its low to finally end the day at 5220.45, posting nominal loss of 1.95 points or 0.04%. In the process, it has formed a lower top and lower bottom on the Daily High Low charts.

We have had a truncated and short trading week with just 4 trading sessions. For today, expect the Markets to open more or less flat and look for directions. The intraday trajectory would be crucial to decide the trend for today, while keeping the overall Markets in a range and also bit volatile.

For today, the levels of 5164 and 5149 which are the 200-DMA and 100-DMA of the Market respective are expected to act as major supports for the Markets with the resistance coming in at 5245 and 5290 levels.
The lead indicators continue to show some weakness. The RSI—Relative Strength Index on the Daily Chart is 42.8564 and it has reached its lowest value in last 14-days, which is Bearish. The Daily MACD continues to trade below its signal line and that too is bearish. 

The Markets on Wednesday gave its intraday low of 5171.45. It has attempted to take support near its 200-DMA of 5164. Also, the 100-DMA is just few points below this at 5149 and thus, like Wednesday, the Markets are very near, i.e. around 1-1.5% range of its two major supports. So, until these supports are breached on the downside, no major fall in the Markets can be expected. Until this happens, the Markets may remain in a range or volatile. However, at the same time, NIFTY futures have shown net decrease in Open Interest and this implies that the last hour recovery on Wednesday was more of short covering than fresh buying.

Thus, in such contradictory readings, it is advised to refrain from any major shorts until the Markets breaches the levels of 5164-5148 supports. At the same  times, any fresh positions may be taken very selectively. The next week has two very important events, the Monetary Policy and the Union Budget coming up and the Markets shall react to that. This may keep today’s session range bound and volatile. Overall, very stock specific  approach with caution is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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