MARKET TREND FOR TODAY
June 26, 2012
The Markets had a turbulent start to the week as the levels
of 100-DMA acted as a resistance and the RBI’s announcement did not meet the street
expectations as the Markets ended the day with losses after a buoyant session
during the day. Markets opened higher
contrary to expectations and further strengthened to give the day’s high of
5194.60. This was against the expected resistance levels of 5200 mentioned by
us. It came off a little post the day’s high and traded in a range, but came
off swiftly in the last hour of the trade. It erased all of its gains, dipped
into the red and went on to give the day’s low of 5105.65. It finally ended the
day at 5114.65, posting a net loss of 31.40 points or 0.61%. It has, still
formed a higher top and higher bottom on the Daily High Low Charts.
Severe consolidation continued yesterday and that is likely
to continue today also, but we can expect to see some respite from the quantum
of weakness that we saw yesterday in the last hour of the trade. The Markets
are expected to open on a flat to
moderately positive note and look for directions. There is no negative
breakdown on Charts and thus, the intraday trajectory would be continue to
remain critically important as the Markets continues to remain in a broad
range.
The levels of 5162 and 5200 would continue to act as
resistance on the Charts and the levels of 5090 and 5074 shall act as immediate
support.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 55.3369 and it continues to remain neutral
as it shows no negative or positive divergence and / or failure swings. The
Daily MACD still continues to remain bullish as it trades above its signal
line. The NIFTY PCR stands at 1.45 as against 1.52 yesterday.
Having said this, it is important to note that the NIFTY and
Stock Futures have added in net Open Interest and thus this shows creation of
fresh shorts on key select counters in the last hour of the trade.
We can fairly conclude that there is no negative breach on
the Charts as yet and the Markets shall continue to remain in the broad trading range however, the levels of
5200 has become an immediate top and
fresh up move shall occur only above 5200. However, again, given no negative
breach on the Charts, the Markets shall remain in a range with an upward bias
as the under current remains intact.
All and all, give this reading of no negative breach on one
hand and the levels of 5200 acting as immediate top, this range bound movement
shall continue. Any profit taking bouts should be used to make select purchases
and shorts should be strictly avoided. However, at the same time, profits now
needs to be vigilantly protected at higher levels. Overall, positive caution is
advised.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
