Today expect the Markets to open on a modest and quiet note and look for directions. The session would remain dominated with three distinct factors. The INFOSYS Numbers, the reaction to the modestly weak IIP Data that came in and also the CPI inflation that is slated to come today evening, which is expected to remain modestly higher. In overall terms, the Markets would continue to remain in range bound consolidation.
For today, the levels of 6820 and 6850 would act as immediate resistance for the Markets. The supports exist much lower at 6730 and 6675 levels.
The RSI--Relative Strength Index on the Daily Chart is 73.1648 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. Though, it continues to trade very much in "overbought" territory. The Daily MACD continues to trade above its signal line, but might report negative crossover if the Markets continue to correct in coming sessions.
On the derivative front, the offloading and profit booking continued. This was evident from the fact that NIFTY April futures continued to shed 3.86 lakh shares or 2.34% in Open Interest.
Going by the pattern analysis, the Markets have not given a clear cut breakout above 6776 levels and it continues to trade in "overbought" territory. This will see the Markets continue to trade in a range bound consolidation and some mild correction from these levels cannot be ruled out.
All and all, apart from IT stocks remaining in limelight today, the Markets are all likely to continue to remain in range bound consolidation. However, this form of correction would remain stock and sector specific. Given this fact, it is clear that Markets will not give a run away up move from these levels so easily. Purchases should be kept highly stock and sector specific. While remaining light on exposure, cautious outlook is advised for the Markets.