Thursday, March 31, 2011

Follow Up on today' Market view

In our Daily Market Trend Guide, posted here in the morning (pasted at the end for quick reference), The markets continues to remain extremely risky, given ALL the parameters, technical and statistical. The markets made an intraday high, and precisely on expected lines came off its highs though it ended with gains on back of rollover centric trading.

At this point of time, I would again like to point out that the Markets have risen over 2000 points Senxes and around 500 point NIFTY without and such parabolic rise cannot be called healthy at all for any kind / class of investors.

Also, the signs of impending weakness has already started showing in BANKNIFTY which closed in the red and the CNX MIDCAP which represents broader markets which ended flat.

In nutshell, we continue to caution investors not to get carried away with the rise that is being seen and on the contrary use this levels for exiting any long positions and protecting profits. It is highly advised to refrain from taking blind long positions.

Watch this space in the morning for Daily Market Trend Guide for Friday, April 01.
Milan Vaishnav, Consulting Technical Analyst, MyMoneyPlant co in

"...........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, MyMoneyPlant co in..........."

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

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