Daily Market Trend Guide -- Tuesday, May 10, 2011

MARKET TREND FOR TODAY

The Markets ended on a absolutely flat note heading nowhere in the entire session with intraday volatility ingrained in it and in the process has formed a higher top and bottom on the Daily High Low Chart.

Today, expect the Markets to open on a flat note and look for directions. Intraday trajectory, like yesterday, shall be significant to decide the trend for today. With the Markets expected to open on a flat note, the levels of 5590 and 5625 shall act as resistance and the levels of 5510 and 5480 shall continue to act as support.

The Markets, after an attempt to make a reversal on Friday, have made a higher top and higher bottom on the Daily High Low Charts which is, though feeble and weak, but an attempt to continue with the reversal.

The RSI—Relative Strength Index on the Daily Charts is 40.2089 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line.

The Markets spent the day yesterday in absence of any triggers, positive as well as negative.

Technically speaking, the Markets have shown signs of bottoming out and has made a potential reversal as we saw discomfort at lower levels and short covering from those levels. However, another important point that  that short covering should get replaced with fresh buying and for that volumes would play an critical role. In both of the previous session, especially yesterday, the volumes and participation has grossly remained a concern.

All and all with the lead indicators remaining intact and no negatives in the offing, the overall technical bias still remains on upside though volumes would be essential with positive intraday trajectory. Stock specific approach with cautiously positive optimism is advised for today.

Milan Vaishhnav
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, May 09, 2011

MARKET TREND FOR TODAY

After nine sessions of decline, the Markets finally attempted to rebound which was very much overdue and very evidently expected as mentioned in our Special Note (Edition dated Friday, 6th May), the Markets ended with gains and in the process have formed a similar top but higher bottom on the Daily High Low Charts.

Today’s session remains critically important for the Markets as the attempted reversal / bottom formation should get confirmed today in form of a higher top and bottom on the Daily Charts.

The Markets today are expected to open on a positive note and look for directions and it would be again critically important for the Markets to remain in rising trajectory to capitalize on the positive opening. For today, the levels of 5624 and 5670 shall act as resistance and the levels of 5525 and 5480 shall act as support.

The RSI—Relative Strength Index on the Daily Chart is 40.23 and it shows no negative divergence or a failure swing and is therefore neutral. The Daily MACD however still continues to trade below its signal line.

On Weekly Charts too, RSI is neutral as it show no negative divergence or failure swings. The MACD however, continues to remain in Buy mode as it trades above its signal line.

Friday’s session saw just 0.21% of addition in NIFTY Futures Open Interest which indicates there was more of short covering any very little fresh buying. However FIIs remained net buyers in F&O segment after nine days which is positive sign. DIIs continued to remain net buyers.

It is, therefore, critically important that the markets capitalizes on the positive opening that it is likely to get today. Stock specific purchases while protecting profits at higher levels may be continued. Though no clear signals / confirmation of reversal yet, the bias remains on the upside. Positive caution is advised.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com