Daily Market Trend Guide -- Friday, November 11, 2011 (Published before the Markets opened)

MARKET TREND FOR TODAY

 

The Markets had a disappointing session on Wednesday as the Markets chose to play safe amid European uncertainties and shed some weight in the last hour of the trade as yesterday was a trading holiday and ended the day with losses and in the process higher top but lower bottom on the Daily High Low Charts.

Today, we can expect stability to return to the Markets and the Markets are expected to open on a flat to mildly positive note and trade positive at least in the initial trade. The Markets are likely to take support near the previous lows but the intraday trajectory would be extremely important today not only to decide the trend for today but for coming days. The US and the European Markets have rebounded from the intraday lows yesterday and the favorable technicals are likely to support the stability that is expected to return. The levels of 5220 and 5190 are likely to act as supports today.

All lead indicators still continue to remain in place. RSI—Relative Strength Index is at 51.9293 and is neutral as it shows no negative divergence or failure swing and Daily MACD continues to remain bullish as it trades above its signal line.

The reading of the Charts is very clear. We have been mentioning about falling trend line drawing from life time highs of Nifty from 6338 levels joining falling tops of 5944, 5600, and this has posed resistance to the Markets around 5310 levels. On the other side, the Markets have taken support at its 100 DMA at Close which is 5223 today.

Having said this, it is important to note that the  Markets are likely to remain in this 100-odd points range, while attempting to break above it. The 100-DMA at Close levels is the important levels (including its filter) to act as important support.

All and all, this technical factor as well as related factors such as announcement of IIP, and the external global cues are likely to keep Markets volatile and range bound. But equally important to note that there has been no structural breach on the Daily Charts. Therefore, while avoiding shorts, some stock specific purchases may be made. Overall, cautious approach 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 -- Wednesday, November 09, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets expectedly remained in the consolidation stage as it opened moderately positive, pared its gains, took support and recovered from its lows again to end the day with moderate gains and in the process have formed a lower top and lower bottom on the Daily High Low charts.

The Markets yesterday recovered from its lows and ended the day near the high point of the day, and thus technically speaking, they are expected to continue with its up move today, at least in the initial trade.

The above reading is further supported by global cues today and thus, we can fairly expect the Markets to open on a positive note today and look for directions while trading positive at least in the initial trade today. With the Markets expected to open positive, the levels of 5330 and 5355 shall act as resistance and the levels of 5350 and 5320 are likely to act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Charts is 60.5594 and is neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it continues to trade above its signal line.

On the Candles, A lower long shadow has occurred. This is typically a bullish signal when it occurs near a support level, which appears to be the case with NIFTY.

Apart from this, we have seen discomfort at lower levels in the Markets as it recovered from its lows yesterday, though on low volumes and in the end it also added Open Interest. This signifies that apart from short covering, some fresh longs have also been seen building up. Having said this, it also remains to be seen that the Markets moves past the falling trend line drawn from its highs of 6338 levels and poses resistance around 5330-5345 levels. Until this happens, we will continue to see range bounds movements which will be volatile and on low volumes. Further we have there-working day truncated week so this may keep the markets in range, while  undercurrent remains bullish. With intraday trajectory crucial, while avoiding shorts, cautious but positive outlook is advised for today.

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