Tuesday, April 5, 2011

Daily Market Trend Guide

MARKET TREND FOR TODAY


After a day of breather, the markets again ended the day with gains reaching its three month high and in the process have given a sharply higher top and bottom on the Daily High Low Charts. For today,  expect to see a flat opening in the Markets. With the flat opening in the Markets, the levels of 5925 and 5950 shall act as resistance and the levels of 5840 and 5775 may act as immediate supports.

The Markets have risen some 650 odd points and some 2250+ points Sensex in past 9-10 sessions practically without any break. Further to this, it has done so purely on liquidity driven scenario defying some major technical resistances as if they never existed and in the process have certainly put retail investors / traders at risk at these levels. The RSI—Relative Strength Index on the Daily Chart is now 71.0226 and is now in OVERBOUGHT range.

In further to this, the Markets have now closed at a Patter Resistance in form of a falling Trend line formed by joining tops from 6335 levels which joins 6181 levels. Today, behavior of the Markets will depend upon its opening above the levels of 5925 and sustaining above it.

Having said this, it would be greatly unhealthy for the Markets with high risk element involved if its continues to rise in spite of major Pattern Resistance and the lead indicators being OVERBOUGHT. This certainly has a danger of getting the retail / small investor getting trapped on the wrong side of trade if one continues to get carried away felling left out from the rally.

It is strongly advised at these levels to avoid direct long positions in NIFTY and NIFTY Components until we see some correction / consolidation on a serious note as this is now getting hazardous. It is rather advised to concentrate on stock specific opportunity while protecting profit at higher levels. High degree of caution is advised for today.
  

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

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

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