Daily Market Trend Guide -- Friday, April 01, 2011

MARKET TREND FOR TODAY

The Markets continued to form a higher top and higher bottom on the Daily High Low charts as it continued its up move for the eighth day in a row to close with gains.

For today, expect the Market to open on a flat to mildly negative note and look for directions. Today’s trend in the Markets would depend largely upon the intraday trajectory the Markets form during the day.

With the Markets expected to open on a flat to mildly negative note, the levels of 5872 and 5910 shall act as resistance and the levels of 5775 and 5665 shall act as supports on the lower side.

All lead indicators continue to remain in place but are on the verge of getting OVERSOLD. The RSI—Relative Strength Index on the Daily Chart is 68.3281 and is nearing its topping out range. It continues to remain Bullish as it has reached its highest value in last 14-days. The Daily MACD continues to trade above its signal line.

Having said this, we have been maintaining in our last two editions of Daily Market Trend Guide that the Markets have risen in an unhealthy and unsustainable manner and needs some consolidation / correction from these levels.

We would again like to point our that the Markets did come off its highs yesterday as expected but saw some short covering again due to rollover activities. HOWEVER, the seeds of impending weakness were started being seen as BANKNIFTY Closed with losses and the broader markets (Midcaps) closed flat. It is all likely that even with some moderately positive opening, the Markets may convert itself in negative falling channel and some correction / consolidation may be seen. It is again strongly advised to exit shorts at these higher levels to protect profits. Investors are advised to refrain from taking long positions at these levels. The policy of cautious approach with expectation of correction setting in is advised for today.

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