Daily Market Trend Guide -- Thursday, March 31, 2011

MARKET TREND FOR TODAY

The Markets yesterday also continued its up move for the seventh day in a row to end again with decent gain and in the process have also continued to form higher top and higher bottom on the Daily High Low charts. Today, expect the Markets to open on a flat to moderately positive note and look for directions.

Now, at this juncture, before we proceed further for any analysis, it becomes important to point out here that the Markets have become artificially over heated and technically too now trades at a highly risky levels and such rise gets unsustainable especially the manner in which it is achieved.

For today, the levels of 5805 and 5825 may act as resistance levels and the levels of 5725 and 5630 may act as supports.

The RSI—Relative Strength Index on the Daily Charts is 66.4146 and continues to remain bullish as it has reached its highest value in last 14-days and does not show any negative divergence. The Daily MACD continues to trade above its signal line.

We again point out at this juncture that the Markets have risen completely defying the pattern analysis and also the fact that it has moved past its important DMAs as if it never existed. Such a rise gets risky and difficult to sustain as some correction / consolidation is necessary to make it healthy. Also, as per the pattern analysis, even with the rise the 100 DMA has continued to fall, slowly but steadily and may cut rising 200 DMA from above. Thus, even a little correction from these levels is likely to give a negative crossover of averages. In continuation of our yesterday’s advise, we continue to maintain to now completely stay away from making any long positions as the rise is getting unsustainable with every passing session. Continue to protect long profits at higher levels and avoid fresh positions. Highly cautious outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in 
+91-9825016331

milanvaishnav@mymoneyplant.co.in 
milanvaishnav@yahoo.com