MARKET TREND FOR TODAY
May 11, 2012
The session remained a disappointing one yesterday as the
Markets failed to capitalize on the positive and strong opening it got as it
pared all of its gains to finally end the day with negligible loss and
consolidate on the Close Charts. The Markets gave a strong opening today and
though it traded in the capped range, it did gave its intraday high of 5039.30.
Just when it seemed that Markets will stage a pullback, it suddenly and sharply
pared all of its gains in a peculiar fashion and pared all of its gains and
dipped into the negative as it gave its day’s low of 4950.30. It recovered a
bit from there and finally ended the day at 4965.70, posting a nominal loss of
9.10 points or 0.18%. It formed a higher top but slightly lower bottom on the
Daily High Low Charts.
Today expect the
Markets to open on a mildly lower note and likely to recover and improve post
opening and thus remain volatile and directionless throughout the session and
is likely to consolidate at Close levels like yesterday. The opening is likely
to take the Markets into OVERSOLD zone and thus turn volatile depending on the
intraday trajectory again. Today, the bias would remain towards improvement as
we go ahead in the session.
The levels of 5025 and 5080 are immediate resistance on the
Charts and the levels of 4940 and 4925 are immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 30.8158
and it is nearly OVERSOLD. Though it has reached its lowest value in l ast
14-days, it does not show any negative divergence. The Daily MACD continues to
remain below its signal line.
The lead indicators are
nearly OVERSOLD, NIFTY has huge short positions outstanding and the NIFTY PCR
is 0.89 which too is nearly OVERSOLD. Any opening weakness will take the
Markets again to its OVERSOLD territory and we may see volatility returning in
the Markets. Further to this, on the
Candles, An Engulfing Bearish Pattern has occurred. If the engulfing bearish pattern occurs
during a downtrend (which appears to be the case with NIFTY), it may be a last
engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the
next candle closes above the bottom the current (black) candle's real body.
Overall, the reading for the Markets remain more or less to same what is being written since two sessions. The Markets will remain volatile, but may continue to consolidate at close levels and have a bias towards upside as per technical factors and also as per the F&O statistics which indicate huge built up of short positions. Further to this, the Markets shall also react to the IIP Numbers coming in. We continue to advise the retail investors to remain light, avoid aggressive positions in the Markets while protecting profits on the existing positions. Other positions may safely be held on to. Overall, caution with tinge of optimism is advised for today.
Overall, the reading for the Markets remain more or less to same what is being written since two sessions. The Markets will remain volatile, but may continue to consolidate at close levels and have a bias towards upside as per technical factors and also as per the F&O statistics which indicate huge built up of short positions. Further to this, the Markets shall also react to the IIP Numbers coming in. We continue to advise the retail investors to remain light, avoid aggressive positions in the Markets while protecting profits on the existing positions. Other positions may safely be held on to. Overall, caution with tinge of optimism is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
