Tuesday, August 28, 2012

Daily Market Trend Guide -- Tuesday, August 28, 2012

MARKET TREND FOR TODAY                                                          August 28, 2012
The Markets had a thoroughly disappointing session as it opened on a mildly positive note and then drifted throughout the rest of the session and ended the day with modest losses. The Markets opened positive and gave their intraday high of 5399.15 in the very early minutes of the trade. The key levels 5400 continued to pose resistance as the Markets reversed the trend immediately after its day’s high and continue to gradually decline for the rest of the session. The Markets went on to give the day’s low of 5346.65 and finally ended the day around those levels at 5350.25, posting a modest loss of 36.45 points or 0.68%. It has formed a similar top and lower bottom on the Daily High Low Charts.

 Today’s Market behavior is expected to remain similar to that of yesterday. A modestly positive to flat opening can be expected and then the Markets are expected to remain subdued with a downward bias. However, with the expiry week on, the session is also likely to remain dominated with rollover centric activities.

For today, with the levels of 5400 remaining as immediate resistance, the supports come in at 5330 and 5315 levels.

The lead indicators continue to paint a little weak picture. The RSI—Relative Strength Index on the Daily Chart is 56.4567 and it has reached its lowest value in last 14-days, which is bearish. Further, the RSI has set a new 14-year low whereas the NIFTY has not yet, and this is Bearish Divergence. The Daily MACD continues to trade above its signal line.

With the Open Interest figures of the current month remaining overall irrelevant due to rollovers count,  given the technical patterns and the overall structure of the Charts, the levels have 5400 which we have been mentioning as one of the key levels have remained as a major resistance point. So, as we have said in our last couple of editions, this levels shall act as a immediate top and sustainable up move shall occur only after the Markets moves past this levels.

All and all, the Markets may remain in a range, also bit volatile given the rollover activities but are likely to trade with overall downward bias. However, selective outperformance would be seen. It is advised to remain highly stock specific and keep protecting profits at higher levels. Overall, cautious approach is advised for the day.

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


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.