Tuesday, January 15, 2013

Daily Market Trend Guide -- Tuesday, January 15, 2013

MARKET TREND FOR TODAY                                                                   January 15, 2013
The levels of 5950-5945 on which the Markets took support a day before continued to hold as the Markets opened on a positive note yesterday, remained buoyant for the entire session and even perked up further up towards the end to end the day with decent gains. The Markets opened on a moderately positive note and it trade sideward with capped gains for a brief time in the morning trade. The Markets rose as it formed a rising channel and remained in the upward rising trajectory for the entire session. In the last hour of the trade, the Markets gained further ground as it went on to give the day’s high of 6036.90. The Inflation numbers which came little lower and therefore better than expected acted in favor of the Markets. The Markets finally ended the day at 6024.05, posting a decent gain of 72.75 points or 1.22% while forming a higher top and higher bottom on the Daily High Low Charts.


Today, expect the Markets to open on a flat to mildly positive note and look for directions. Technically speaking, since the Markets have ended the day near the high point of the day, they are expected to continue with the up move, at least in the initial trade. However, there are chances that it opens flat and consolidates a bit before it attempts to move past the levels of 6042-6050 which is the upper end of the trading range.

The levels of 6050 and 6095 shall act as immediate resistance for the Markets and the supports come in lower at 5990 and 5950 levels.

The lead indicators point towards mild possibility of a mild an brief consolidation. The RSI—Relative Strength Index on the Daily Chart is 64.3570 and it does not show any failure swings. The NIFTY has set a new 14-period high but RSI has not and this is Bearish Divergence. The Daily MACD still continues to remain bearish as it trades below its signal line.

On the Derivative front, NIFTY January Futures have added over 2.30 lakh shares or 1.47% in Open Interest which is a positive sign.

Give this reading of the lead indicators along with the derivatives data, there are mild chances that the Markets would consolidate before it breaks out and move past the levels of 6050. However, the bias remains on the upside as the trend remains intact.

All and all, as the Markets still continues to remain in a range it will have to move past the levels of 6045-6050 comprehensively to achieve a breakout. There are mild chances that we see some brief consolidation period, but with an upward bias. So, while strictly avoiding shorts, longs should be continued to  be taken selectively while protecting profits at higher levels. Selective approach with cautious optimism is advised for today.

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


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