Daily Market Trend Guide -- Tuesday, October 04, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The yesterday’s session remained disappointing as the Markets opened gap down and remained so for the entire session moving in a very narrow 25-odd point range to end the day with losses and in the process have formed a sharply lower top and lower bottom on the Daily High Low charts.

Today, we may expect the Markets to open on a moderately flat note and look for directions and we can also expect the Markets to see some respite from the weakness that it saw in the last two sessions.

With the Markets expected to open today on flat to moderately mild note, the levels of 4810 and 4870 are likely to act as supports and the levels of 4895 and 4925 are likely to act as resistance on the upper side. Along with intraday trajectory that the Markets form, the volumes too would remain critical to decide the trend today.

The RSI—Relative Strength Index on the Daily Chart is 41.0800 and it shows no negative divergence or failure swing and is therefore neutral.

The Daily MACD has turned bearish as it has again reported a  negative crossover and it now trades below its signal line.

At this juncture, it becomes important to note two points. First, the Markets have been trading in a very broad trading range of 4720-5170. And within this range, it has been moving in either direction without any domestic triggers just recklessly following global cues. Also, the Markets have been showing total defiance to technicals and is “controlled” by few big FIIs. This is vindicated with the gap up and gap down opening and then trading around those levels for entire session. This clearly shows artificial trade pattern, wherein an analyst has very little to analyze. Also the volumes have been lower which is a positive sign for Indian Markets.

All and all, we again reiterate to refrain from shorts as no intraday gap/movement is expected. These levels may be used for selective purchases. Cautious optimism is advised as no structural breach on chart is reported.

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

Daily Market Trend Guide -- Monday, October 03, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a disappointing session on Friday, wherein it consolidated in the first half of the session and even traded briefly in the green, but pared all of its recovery in the second half as it ended the day losing 72.20 points. However, the Markets did so on lower volumes and in the process formed a lower top but higher  bottom on the Daily High Low Charts. With this, the Markets have ended the week with net gain of 75.50 points or 1.60%.

For today, expect the Markets to open on a negative note and look for directions and today's movement / trend would depend very much on the intraday trajectory that the Markets form post opening. Today, the Markets are likely to remained weighed down by global factors more than the domestic factors in the initial session.

However, at this point, it is important to note that the Markets have ended the Week with gains and it is trading in a broad trading range, and thus it is very much showing resilience to the global developments.

For today, with the Markets expected to open on a negative note, the levels of 4905 and 4860 are again likely to act as supports.

All lead indicators continue to remain in place. The RSI--Relative Strength Index on the Daily Chart is 45.4604 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD too remains bullish as it trades above its signal line.

On the Weekly Charts, the RSI is 38.7739 and it shows no negative divergence or failure swings and it continues to remain neutral.

The NIFTY Futures have added 2.5% in Open Interst and this shows the Markets have again added short positions in the system as it also trades at discount.

Given all these reading, it can be fairly concluded that the Markets have offlate been behaving in defiance of technical indicators and it often happens when it gets affected with external factors. It also continues to trade in a broad range.

All and all, it is continued to be advised to refrain from shorting as the Markets have been directionless and in a broad range. Given the short positions, it is also likely that the Markets see some improvement post opening in the second half of the session. Stock specific activity may be observed. While avoiding shorts, and maintaining liquidity, cautious outlook is advised for today.

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