Daily Market Trend Guide -- Tuesday, September 06, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets yesterday ended the day with moderate losses, but at the same time  displayed high degree of resilience against global weakness on expected lines and in the process have formed a lower top and lower bottom on the Daily High Low Charts.

For today, the global cues continue to remain weak. This, along with lack of participation in the Markets is likely to keep the Markets in consolidation range.

For today, expect the Markets to open again on a moderately negative note and look for directions. Today, the Markets shall depend critically on the intraday trajectory that it forms along with the volumes to set the trend for today.

For today, since the Markets are expected to open on a moderately negative note, the levels of 5040 and 5075 are to act as resistance and the levels of 4785 and 4960 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 44.5614 and it shows no negative divergence or failure swing and is therefore neutral. The Daily MACD is Bullish as it continues to trade above its signal line.

Yesterday’s session has remained a capped session with the Markets opening low, trading in a range and then recovering. Today also, post negative opening following the global cues, we are again expected to show some resilience and trade in a range with capped downside and high chances of recovery.

Open Interest in both NIFTY and Stock futures have shown addition in Open Interest indicating creation of fresh longs on selective basis.

All and all, with no triggers for the downside, it is advised to refrain from making fresh shorts in the Markets. Though downside may be used to make fresh purchases, that too should be done on highly selective basis as the Markets are expected to remain in a range. While continuing to protect profits at higher levels, cautious outlook is advised for today.

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

Daily Market Trend Guide -- Monday, September 05, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets saw a volatile session on  Friday wherein it consolidated moving in either direction and finally ended the day with modest gains in a session that witnessed very low volumes. In the process, the Markets have continued to form a higher top and higher bottom on the Daily High Low Charts.

Again today, we face a sharp contradiction in domestic technical indicators and global cues. While global cues represent weakness, all technical indicators point towards continuing pullback. However, the Markets are expected to take a middle path.

This means, expect the Markets to open on a negative note following weak global cues but later in the day, also expected it to recover as technicals are expected to take over and the Markets expected to show resilience. For today, the levels of 5060 and 5095 are expected to act as resistance and the levels of 4990 and 4960 are expected to act as supports.

All lead indicators point towards pullback to continue. The RSI — Relative Strength Index on Daily Chart is 45.7266 and it has reached its highest value in last 14-days which is BULLISH. Also, RSI has given a new 14-period high, whereas NIFTY has not as yet. This is BULLISH DIVERGENCE. The Daily MACD has reported a positive crossover as it now trades above its signal line. On the Weekly Charts too, RSI is 39.4384 and has move out from bottoming out zone, which is a good sign. Further, Weekly MACD trades below its signal line but is now in OVERSOLD range.

FIIs and DIIs have remained net buyers in both Cash as Derivative segment.

However, volumes have remained a concern. Thus, given the above reading, the most likely scenario can be that Markets may open down following global weakness but may show resilience and recover as the day progresses as overall technical view remains on the continuation of pullback. While it is advised to keep protecting profits at higher levels, it is strongly advised to avoid shorts. Cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

http://www.mymoneyplant.co.in/

 +91-9825016331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com