MARKET TREND FOR TODAY
March 30, 2012
The Markets held on to its 200-DMA which is
its major support at Close as it ended the day yesterday amid volatility with
just nominal losses. The Markets opened on a negative note following weak
global cues and remained negative for the entire session. The Markets, after
briefly trading in a range, pared some of its recovery in the afternoon trade
as it gave its intraday low of 5135.95. However, in the second half of the
session, it saw a smart recovery and recovered almost most of its losses. It
finally ended the day at 5178.85, posting a nominal loss of 15.90 points or
0.31%. In the process, it has formed a mild lower top and lower bottom on the
Daily High Low charts.
Yesterday was the expiry of the March
series and it remained expectedly volatile. The Markets did went below its
important support levels of 200-DMA, which is 5149 today, but has closed well
above its and has held that level as a support on the Close Charts, which is
certainly a positive sign.
For today, we can expect some stability to
return to the Markets and we may see some respite from the weakness that we saw
yesterday as the Markets show some signs of this happening. For today, expect
the Markets to open on a moderately positive note and look for directions. The
intraday trajectory that it forms after opening would be very crucial to
determine the trend for today. The Markets may consolidate with upward bias but
will have to maintain and trade above its 200-DMA in order to avoid any
weakness.
The RSI—Relative Strength Index on the
Daily Chart is 42.7309 and it shows no failure swings. The NIFTY has given its
14-day low but the RSI has not and this is BULLISH DIVERGENCE. The Daily MACD
continues to trade below its signal line.
The Markets saw short covering which was
expected with the Markets trading near their important support of 200-DMA. It
is important to note that there is not structural breach of any king on the
Daily Charts as the Markets continue to trade above its 200-DMA. Both Stock and
NIFTY Futures have shown minor addition in Open Interest too.
All and all, with no negative breach on the
Charts as of now, the Markets are likely to trade and consolidate with upward
bias. Shorts should be avoided with the Markets trading above its important support
levels and this opportunity should be used to take longs on selective basis.
The weakness shall creep in only if the Markets moves and closes below its
200-DMA and its filter and until this happens, it is likely to consolidate with
upward bias. Overall positive approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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