The Diesel Price hike which has come unexpected and the extension of QE by the Fed Reserve has set the stage for a gap up opening today. We are all set to see a strong gap up opening and the key would be to see if the Markets sustains the opening gains and capitalizes on strong opening further during the day.
Today's opening will have the Markets open above its resistance levels of 5448-5455. Next resistance on charts are at 5498-5500 levels. This too is a major pattern resistance.
The RSI--Relative Strength Index on Daily Chart is 64.6302 and it has reached its highest value in last 14-days which is bullish. The Daily MACD trades above its signal line.
Having said this, it is important to note that the QE - Quantitative Easing would be cheered by the global markets but it has been good for India only for short term. If we take a medium term view, the result of influx of funds have caused macro economic concerns fueling inflationary concerns. This may desist RBI from announcing immediate rate cuts on this Monday's monetary policy review.
Further to this, on the contrary, Markets are likely to cheer diesel price hike more as this is seen as a bold move towards fiscal consolidation. The Markets will also see if there are no rollback pressures and if they are, the Centre does not relents to such pressures.
All and all, positive session ahead. Selective purchases may be made and wherever profits are available, they should be protected at higher levels. Overall, positive outlook is advised for today.