MARKET TREND FOR TODAY
July 2, 2012
The Markets had a very robust ending to the week and
beginning to a new derivative series as it reacted to favorable technicals
after severe consolidation after couple of days as it ended the day on a robust
note. The Markets opened well above the expected resistance levels of 5190 and
remained above that levels for the entire day and went on to make intermittent
highs. It gave its intraday high of 5286.25 during the later part of the session.
It finally ended the day near the high point of the day at 5278.90 posting a
robust gain of 129.75 points or 2.52%. The volumes remained little higher than
the average. The Markets have formed a sharply higher top and higher bottom on
the Daily High Low Charts. It has ended the week with net gains of 132.85
points or 2.58%.
Today, the Markets are expected to open on a moderately
positive note and continue with their up move at least in the initial session.
The Markets have ended the day near the resistance of a minor double top and
the key would be to see the behavior of the Markets around these levels. It
would be important to see if the Markets
continues with its up move or consolidates again on the higher levels.
The levels of 5350 shall act as immediate resistance whereas
supports come much lower at 5225 and 5190 due to sharp single day up move.
The
RSI—Relative Strength Index on the Daily Chart is 67.4479 and it has reached
its highest value in last 14-days and is bullish. It does not show any positive
or negative divergence. The Daily MACD continues to trade above its signal line
and is therefore bullish. On the Candles, A rising
window occurred (where the top of
the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a
bullish trend.
On the Weekly Charts, RSI
is 55.6742 and it has reached its highest value in last 14 days which is bullish.
Further, the Weekly RSI has made a new 14-week high but the NIFTY has not yet,
and this is bullish divergence. The Weekly MACD trades above its signal line
and that too is bullish.
The NIFTY and Stock Futures
have added huge Open Interest across the board and this clearly indicates the buildup
of long positions. The NIFTY PCR stands at 1.24 and this too leaves a
significant room on the upside.
Having said all this, it
can be fairly be concluded that apart from a consolidation – that too if it
occurs for a day or so, the bias is very clearly on the upside and the Markets
still has some clear room on the upside. The undercurrent remains absolutely
intact.
All and all, it is advised
to continue with the upward bias as all indicators point towards continuation of uptrend. While avoiding
shorts, selective longs may be taken.
Though a consolidation either for a day or so, or intraday cannot be ruled out,
but the undercurrent certainly remains buoyant. Positive outlook is advised for
today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
