MARKET TREND FOR TODAY
April 12, 2012
The Markets continued to see a volatile
session yesterday and consolidated at close after recovering from day’s low
amid great volatility and ended the day with moderate losses. The Markets
opened with a minor gap down of around 1% and traded in a tight range on the
lower side in the morning session. However, in the afternoon session, the
Markets attempted a recovery and not only it recovered from its day’s lows but
went on to trade in the green and gave its intraday high of 5263.65, recovering
almost 70-odd points from its low. Volatility crept in again as it pared almost
all of its gains. It recovered half of it again but finally ended the day at
5226.85, posting a moderate loss of 16.75 points or 0.32%. In the process, it
has formed a higher top but lower bottom on the Daily High Low charts.
Today, expect the Markets to continue to
consolidate as it has been doing in the last couple of sessions. It is expected
to open flat and look for direction and would continue to heavily depend upon
the intraday trajectory it forms and because of this, it is likely to also
continue to remain volatile.
For today, the levels of 5265 and 5325 are
likely to act as immediate resistance and the levels of 5202 and 5146 shall act
as major support levels in form of its 200DMA.
As evident from the charts above, the
Markets have continue to remain in a broad trading range with no breakout on
either side and thus, is expected to continue to consolidate amid volatility.
The RSI—Relative Strength Index on the
Daily Chart is 45.7470 and is neutral as it shows no negative divergence or
failure swings. The Daily MACD trades below its signal line.
It is important to note that NIFTY’s Open
Interest is at its all time low levels and this reduces the fears of any
negative breakout on the Charts. Also, after shedding Open Interest in last seven
consecutive sessions, yesterday, it has seen a moderate addition in Open
Interest. This has accompanied with the Stock Futures too adding in total Open
Interest. Signifies mild level of buying at these levels.
All and all, this points out that the
Markets shall continue to consolidate and shall do that with upward bias. Even
in case of any weakness, it shall be short lived with the Markets not expected
to breach any major support levels. Volatility and stock specific action is
likely to continue. Markets shall also react a bit to the IIP numbers expected.
Overall, the trend remains intact and thus, it is strongly advised to avoid any
shorts and aggressive positions on either side. Selective purchases may be
made. Overall, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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