Monday, May 30, 2011

Daily Market Trend Guide -- Monday, May 30, 2011

MARKET TREND FOR TODAY

The Markets continued its up move on Friday too as ended the day with gains on the second day in a row to end the week flat with net loss of just 10 points and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts.

For today, expect a flat to positive opening in the Markets. With the Markets expected to open on a flat to positive note, the levels of 5520 and 5565 shall act as resistance and the levels of 5450 and 5430 shall act as support.

All lead indicators point towards potential confirmation of attempted reversal of the Markets. The RSI -- Relative Strength Index on the Daily Chart is 45.7192. RSI has reached its highest value in last 14-days which is BULLISH. Also, RSI has set a new 14-day high but NIFTY has still not, which is BULLISH DIVERGENCE. The Daily MACD however continues to trade below its signal line but is likely to give a buy signal given the continuation of the trend.

On the Weekly Charts, the RSI is 44.1693 and is neutral as it shows no negative divergence or failure swings. On the Candles, A Hammer occurred. Hammers appear after a significant decline or if the Security is Oversold, which is the Case is NIFTY (i.e. significant decline) to be valid. This usually indicates formation of support level and is thus considered a bullish pattern. Also, A Handing Man occurred. Since this has occurred after a downtrend, which is the case with NIFTY, it is called a Bullish Hammer.

Given this reading, the volumes continue to remain a concern and thus we will need continued and increased participation in the markets to capitalize on the above readings. Given the F&O Data, the NIFTY and Stock futures have continued to add Open Interests.

All and all, the Markets have limited downside this week with overall bias remaining towards upside. It is strictly advised to refrain from shorts and continue to make selective purchases. Even if we see some consolidation for a day or two, the over all bias remains on the upside.

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

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.