MARKET TREND FOR TODAY
July 6, 2012
The Markets tried to further its up move towards the end of
the session and made an attempt to give a positive break out as it ended the
day with modest gains. The Markets opened flat and spent the most part of the
session in a extremely narrow range moving in and out of the positive territory
and traded for quite a long time around its previous close. However, again, it
saw some action coming in as it saw some strength coming in the last hour and
half of the trade. It spurt up a bit and gave its intraday high of 5333.65.
This was against the resistance levels of 5325 mentioned by us today, as well
as in last two of the previous editions. It slightly came off and finally ended
the day at 5327.30, posting a modest gain of 24.75 points or 0.47%. The volumes
remained around its average and the Markets formed a mildly higher top and
higher bottom on the Daily High Low Charts.
Expect the Markets to open flat again and continue with the
consolidation on the fifth day also and thus again continue to rely on the
intraday trajectory that it shall form. The Markets are expected to open flat
and look for directions , but this time, minor correction cannot be ruled out as indicated by the lead
indicators.
The levels 5340 and 5385 are expected to act as resistance
and the levels of 5280 and 5215 are expected to act as immediate supports.
The lead indicators and other factors paint a mix picture.
The RSI—Relative Strength Index on the Daily Charts is 70.5307 and it has
reached its highest value in last 14-days, which is bullish. But at the same
time, it has entered its “Overbought” range. It does not show any positive or
negative divergence. The Daily MACD remains bullish as it continues to trade
above its signal line.
Along with the above mix reading of the lead indicators, the
NIFTY futures have added over 6 lakh shares and the Stock Futures have added
over 2 crores shares in Open Interest which indicates buoyant undercurrent. The
NIFTY PCR stands at 1.22 which continues to leave a significant gap on the
upside.
Despite the mix reading of the lead indicators which are
short term technical indicators, it is important to note that the Markets have
taken an overall good fundamental turn for the better. So, the Markets may
consolidate a bit, or even if it sees minor correction in coming days, it would
be on the contrary healthy for the Markets as it shall prepare itself for
further up move.
All and all, consolidation ahead in the day likely. Some
occasional bouts may also be seen and any short term downside may be used for
making selective purchases, though
keeping the outlook highly stock specific. Existing profits may be
protected and shorts should be avoided. Overall, cautious optimism is advised
for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.