Tuesday, May 29, 2012

Daily Market Trend Guide -- Tuesday, May 29, 2012

MARKET TREND FOR TODAY                                                    May 29, 2012
The Markets had a pleasant session today, especially the later half as it saw the initial volatility but ended the day with decent gains. The Markets opened on a quietly positive note and traded with capped gains in the early session. The Markets did saw some intermittent volatility in the first half of the session while it continued to maintain gains. However, in the second half of the session, Markets saw itself getting stronger as the Markets went on to give the day’s high of 49994.95. It closed near the high point of the day at 4985.65, posting a decent gain of 65.25 points or 1.33% as it continued with its up move after a day’s consolidation. It has formed a slightly higher top and higher bottom on the Daily High  Low Charts.

Today, we can expect the Markets to open initially on a flat note and then continue with the up move. The technical as well as external global factors support this. Technically speaking, the Markets are  witnessing a successful pullback after the lows of 18th May. The volatility shall remain and intraday trajectory would continue to remain important.

For today, the levels of 5045 and 5070 which is the 200DMA for the Markets are immediate resistance levels and the levels of 4950 and 4910 are immediate supports on the Charts.

The lead indicators continue to show the undercurrent as buoyant. The RSI—Relative Strength Index on the Daily Chart is 46.9966 and it has reached its highest value in last 14-days which is bullish. It does not show any failure swing. The Daily MACD continues to remain bullish as it trades above its signal line.

The NIFTY and Stock Futures have continued to add open interest with the rise and this implies creation of fresh long positions in the Markets. 

All and all, technically speaking, the uptrend is likely to continue though some consolidation during the day and intermittent bouts of volatility cannot be ruled out. Going purely by technical factors, the Markets should reach up to its 500-DMA levels of 5065-5070 and then consolidate. After that we will if it this is a pullback or if this translates into reversal of trend later. Stock specific activities would be seen. Any intermittent weakness can be used to make selective purchases while vigilantly protecting profits at higher levels. Overall, positive caution is advised for today.

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



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