Tuesday, March 13, 2012

Daily Market Trend Guide -- Tuesday, March 13, 2012

MARKET TREND FOR TODAY                                                   March 13, 2012
The Markets had a little disappointing session yesterday as it failed to sustain its opening gains as closed the day with relatively small gains as compared to its opening. The Markets almost saw a gap up opening and gave its intraday high of 5421.90 in the early seconds of the trade. The Markets, however, saw itself in falling trajectory immediately. It pared all of its gains in the morning trade and momentarily slipped into the red as it gave its day’s low of 5327.30, coming off almost over 90-odd points from its day’s high. Though, it recovered a bit again and finally ended the day at 5359.55, posting a net gain of 26 points or 0.49%. It has formed a higher top and higher bottom on the Daily High Low charts.

Today would be a important session for the Markets. As evident from the above chart, the way the 200 and 100DMA have held as support so far, so has the levels of 5400-5420 held as immediately resistance. Yesterday also, the Markets resisted and came off from those levels.

Today, expect the Markets to open positive, but again near its crucial resistance zone and it would be critically important to see the behaviour of the Markets vis-à-vis the levels of 5400-5420 range as that would decide the trend for the day. Thus, the intraday trajectory that the Markets form would be all the more important.
The Markets have been volatile in past sessions as it awaits to react to the rest of the two important events, the Monetary Policy and the Union Budget. 

The RSI—Relative Strength Index on the Daily Chart is 53.5864 and is neutral as it shows no negative divergence or failure swings. The Daily MACD is bearish as it continues to trade below its signal line. 

Having said this, it is important to note that so far, the range of 5400-5420 have held out as immediate resistance and shall continue to do so until the Markets breaches the levels on the upside. Thus, post opening near those levels, it would be important for the Markets to capitalize on that possible strong opening and move past those levels. Until that happens, there are chances that Markets comes off after opening positive and remains in the broad range of 5060-5420 levels. In the process, it can remain very volatile.

Overall, it is advised to approach the Markets with good amount of caution. There is no breakout on the upside as yet, and also there is no downward breach on the Charts too. The Markets are in are in a broad range and thus high degree of volatility may remain in the entire week. Aggressive purchases may be avoided and buying should remain highly stock specific with vigilant protection of profits at higher levels. Overall, continuance of cautious approach is advised for today.

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


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