MARKET TREND FOR TODAY March 21, 2012
The Markets took an expected breather after three days of decline as it spent an volatile session on expected lines and ended the day with mild gains. The Markets opened on a moderately positive note and gave its intraday high of 5297.35 in the morning trade. However, the Markets pared all of its gains in the first half of the session. It went into negative to give its intraday low of 5233.35. However, the final leg of the session saw recovery again from its lows and Markets not only traded in the green but went almost near their day’s high. It however ended the day at 5274.85, posting a moderate gain of 17.80 points or 0.34%. It has continued to form lower top and lower bottom on the Daily High Low Charts.
Today’s analysis remains more or less similar to that of yesterday. Today also, we can expect the Markets to open on a moderately positive note and look for directions. The intraday trajectory would continue to remain critical to decide the trend for the day. There has been no breach on the Charts and the Markets continues to trade near their support and are expected to remain range bound if volumes fail to cheer.
For today, the levels of 5300 and 5345 shall act as immediate resistance and the 50-DMA levels of 5252 an the 200-DMA levels of 5159 are immediate support on the Charts.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 46.2846 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line.
There has been some contradiction seen in the F&O data. The NIFTY futures have shed some 3.30 lakh shares in Open Interest while most of the Stock futures have seen additions in the Open Interest. One of the readings from this is that some fresh longs have been created in the stock futures with some unwinding in the NIFTY. However, the Markets continue to hold support of its 50-DMA until now and any breach of this level may take it to test its 200-DMA which is one of its major support.
All and all, the overall consolidation in the Markets is likely to continue. The Markets are expected to trade in a range and during this course, may remain range bound and also volatile. Stock specific activity will continue to be seen. Longs should be taken very selectively, while protecting profits at higher levels while shorts should be avoided as there is no negative breach on the Charts as of now. Overall, like yesterday, positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
