Thursday, July 5, 2012

Daily Market Trend Guide -- Thursday, July 05, 2012

MARKET TREND FOR TODAY                                                          July 5, 2012
The Markets attempted a positive breakout, though it did not achieved yet  but ended the day with minor gains. The Markets opened on a positive note and gave the intraday high of 5317.65 in the early minutes of the trade. This was against the levels of 5325 mentioned by us. After giving this high, the Markets gradually drifted and in the afternoon trade and gave its intraday low of 5273.30. It however recovered in the in the last hour and half of the session and then traded in the positive territory, though in a capped range. It finally ended the day at 5302.55, posting a minor gain of 14.60 points or 0.28%. The positive consolidation continued as the Markets have formed a parallel bar on the Daily High Low Charts.

The Markets have continued to remain in consolidation phase and today’s analysis is going to be no different than what is being carried out since last 2-3 sessions. The Markets are expected to open on a flat to mildly negative note and look for directions. The consolidation shall continue and thus, again, the intraday trajectory would continue to remain important. The only difference being that the bias has shifted more towards upside with the Markets ending near the high point of the day.

The levels of 5325 and 5360 shall act as immediate resistance and the levels of 5275 and 5210 shall act as immediate supports.

All lead indicators point towards continuing upside and upward  bias. The RSI—Relative Strength Index on the Daily Chart is 68.9433 and it has reached its highest value in last 14-days which is bullish. It does not show any negative divergence. The Daily MACD continues to remain bullish as it trades near its signal line.

The NIFTY and stock futures have continued to add open interest while the Rupee has continued to appreciate. The lead indicators  too point towards upward bias and one more up move. At the same time, it is also important to note that given the value of lead indicators, there are high chances that we see one up move and the Markets continues to consolidate again or correct a bit.

All and all, the bias continues to remain towards up side. The intraday trajectory would continue to be important. Very selective buying should be done but at the same time, equal attention should be paid in exiting profit making positions. Profit protection at these levels would be equally important. Shorts and aggressive positions should be appropriate. Overall, positive caution is advised.

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


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