Daily Market Trend Guide -- Tuesday, May 24, 2011

MARKET TREND FOR TODAY

As mentioned, the Markets had an utterly disappointing session yesterday as it not only saw a gap down opening but also remained under pressure for the entire session to end the day with deep cut and in the process have formed a lower top and lower bottom on the Daily High Low Charts.

Today, expect the  Markets to open flat and look for directions and most probably we may again see some respite from the downside and weakness that we saw yesterday.

At this juncture, we wish to highlight certain important points. The Markets have been behaving in most artificial and unnatural manner, especially in last couple of session, in defiance of technicals. For example, the Markets had shown very clear signs of reversal on Friday and it had no reason at all, technical or what so ever, to have a gap down opening yesterday. The gap down openings, and the moving of markets in pre-decided range very clearly shows the Markets are controlled by few big players with total absence of retail participation. Further proof of this is that on the Technical Charts, we typically see reluctance of the lead indicators. For example, the RSI on Daily Chart is 35.8155. Though Markets have formed its 14-day low, the RSI has not. This is BULLISH DIVERGENCE.  Further, the short term moving averages have reported a positive cross over. Thus, the charts are certainly saying that the behavior of the Markets is more of speculative nature, somewhat in defiance of technicals. Though it I sad that the Retail Investors continue to suffer from speculative activities of few bit players, for today, we strongly advice to continue to refrain from short positions. We may continue to see such erratic behavior in the Markets owing to expiry week, we advice to cautiously use this dips for making fresh selective purchases.

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