Monday, November 12, 2012

Daily Market Trend Guide -- Monday, November 12, 2012

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MARKET TREND FOR TODAY                                                             November 12, 2012
After opening flat and mildly positive, the session on Friday turned out expectedly negative as the Markets ended the day with losses. The Markets opened on a mildly positive note and traded in a capped range in positive territory in the first hour of the trade as it gave its intraday high of 5751.70. The Markets thereafter slipped into the red and transformed itself into falling trajectory. The Markets remained in such negative trajectory for the rest of the session as it continued to drift. The Markets went on to give the day’s low of 5677.75, while ruling below the levels of 5730. Not much recovery was seen from those lows and the Markets finally ended the day at 5686.25, posting a net loss of 52.50 points or 0.91%, forming a higher top but lower bottom on the Daily High Low Charts.

Today, we can fairly expect a mildly negative opening again and a flat, quiet and listless trade is expected in the initial session. The Markets have breached the important support of 5630 and weakness is likely to persist until the Markets rule below this level. Therefore, the opening levels today and the intraday trajectory thereafter shall be critically important to decide the trend for today.

For today, the levels of 5730 and 5750 shall act as resistance and the levels of 5630 is likely to act as immediate support for the Markets.

The RSI—Relative Strength Index on the Daily Chart is 52.2008 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD has given a sell signal again and it is bearish as it now trades again below its signal line. 

On the Weekly Charts, on the Candles, a potential weak signal has occurred. A Shooting Star has occurred on the Candles and if this happens during a uptrend, as in case of NIFTY, the long upper shadow indicates that the bears are getting control of the Markets and a potential top may occur resulting into immediate short term weakness. The RSI on the Weekly Charts stands neutral and MACD trades above its signal line.

The interpretation of these lead indicators on the Daily and Weekly charts can be said as neutral to negative. 

On the derivative side, the NIFTY Future have added very nominal open interest of 0.16% with Friday’s decline which indicates that there are no major shorts that are created in the system.

All and all, the levels of 5730 would continue to act as immediate resistance and this is likely to keep the Markets in capped range with little volatility with downward bias. No aggressive longs should be taken until the Markets moves past these levels and high degree of caution is advised on the long side. Overall cautious approach to the Markets in this week is advised.

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


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