Daily Market Trend Guide -- Friday, July 08, 2011

MARKET TREND FOR TODAY

The Markets staged a strong up move yesterday after a steady and quiet start and ended the day with robust gains and in the process have formed a sharply higher to and higher bottom on the Daily High Low Charts.

Today, would be a critical session of the Markets as it has closed yesterday near two of its important and major resistances.

Today, expect the Markets to open on a positive note following positive global cues and trade positive at least in the initial session. Thereafter, it would be very critical to see what trajectory it forms in the early session, coupled with the volumes.

Today, with the Markets expected to open positive, 5750 and 5770 shall act as resistance and the immediate supports are expected to come in at 5680 and 5610.

The RSI—Relative Strength Index on the Daily Chart is 67.3596 and it does not show any negative divergence. It has reached its highest value in 14-days and this is bullish. The Daily MACD continues to trade above its signal line.

At this juncture, we need to draw your attention to two important factors. There is a falling trend line drawn from the NIFTY’s lifetime highs of 6335, and joining the subsequent lower tops at 6181 and 5906, poses a resistance to the Markets around 5700 levels. The Markets have closed a notch above this but apart from the above pattern resistance, the 200 DMA of the Markets is at 5743, which again is a major resistance. Also, as per the F&O  Data, the FIIs have indulged into huge short covering yesterday.

All and all, the conclusion can be drawn that the Markets will have to move past and Close above its 200 DMA in order to move out of the falling channel and also the resistance of 200 DMA. It is advised to exercise caution until this levels are passed and not to get carried away with the up move that occurred yesterday. Continuation of stock specific approach with protection of profits and cautious outlook is advised for today.

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

Daily Market Trend Guide -- Thursday, July 07, 2011

MARKET TREND FOR TODAY

The Markets spent a resilient session yesterday as it continued to consolidate rather than correct and ended  flat with nominal losses. In this process, the Markets have continued to give a lower top and lower bottom on the Daily High Low Charts.

Today is going to be no different. The Markets are likely to open on a flat note and look for directions heavily depending upon the volumes and the intraday trajectory that it forms.

With the Markets likely to open on a flat note, the levels of 5670 and 5710 continues to remain resistance levels and the supports continue to exist  at 5580 and 5520 levels on the lower side.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 60.5435 and it shows no negative divergence or failure swings and is therefore neutral. The Daily MACD continues to trade above its signal line.

On the Candles, A long upper shadow occurred. Since this has occurred after the pullback near the high price levels, this can be regarded as a potentially bearish indication. Also A Spinning Top has occurred which signifies potential temporary weakness at current levels.

The Markets have shown resilience in last couple of session as it has seen some short covering from lower levels keeping is range bound and consolidation instead of correcting. However, in doing so, the volumes have been lower than average and the formation of lower top and bottom have continued so far. Also, given this technical reading on Candles, and the lead indicators neutral, we continue to advise caution until the Markets moves past the levels of 5710 again. Until this happens, as we have been advising this week, highly stock specific and selective approach should continued to be adopted while vigilantly protecting profits at higher levels. Overall, a range bound, slightly volatile day expected. Cautious outlook is advised for today.

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