Monday, July 2, 2012

Daily Market Trend Guide -- Monday, July 02, 2012

MARKET TREND FOR TODAY                                                         July 2, 2012
The Markets had a very robust ending to the week and beginning to a new derivative series as it reacted to favorable technicals after severe consolidation after couple of days as it ended the day on a robust note. The Markets opened well above the expected resistance levels of 5190 and remained above that levels for the entire day and went on to make intermittent highs. It gave its intraday high of 5286.25 during the later part of the session. It finally ended the day near the high point of the day at 5278.90 posting a robust gain of 129.75 points or 2.52%. The volumes remained little higher than the average. The Markets have formed a sharply higher top and higher bottom on the Daily High Low Charts. It has ended the week with net gains of 132.85 points or 2.58%.

Today, the Markets are expected to open on a moderately positive note and continue with their up move at least in the initial session. The Markets have ended the day near the resistance of a minor double top and the key would be to see the behavior of the Markets around these levels. It would  be important to see if the Markets continues with its up move or consolidates again on the higher levels.

The levels of 5350 shall act as immediate resistance whereas supports come much lower at 5225 and 5190 due to sharp single day up move.

The RSI—Relative Strength Index on the Daily Chart is 67.4479 and it has reached its highest value in last 14-days and is bullish. It does not show any positive or negative divergence. The Daily MACD continues to trade above its signal line and is therefore bullish. On the Candles, A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.

On the Weekly Charts, RSI is 55.6742 and it has reached its highest value in last 14 days which is bullish. Further, the Weekly RSI has made a new 14-week high but the NIFTY has not yet, and this is bullish divergence. The Weekly MACD trades above its signal line and that too is bullish.

The NIFTY and Stock Futures have added huge Open Interest across the board and this clearly indicates the buildup of long positions. The NIFTY PCR stands at 1.24 and this too leaves a significant room on the upside.

Having said all this, it can be fairly be concluded that apart from a consolidation – that too if it occurs for a day or so, the bias is very clearly on the upside and the Markets still has some clear room on the upside. The undercurrent remains absolutely intact.

All and all, it is advised to continue with the upward bias as all indicators point towards  continuation of uptrend. While avoiding shorts, selective  longs may be taken. Though a consolidation either for a day or so, or intraday cannot be ruled out, but the undercurrent certainly remains buoyant. Positive outlook 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.