Daily Market Trend Guide -- Wednesday, May 11, 2011

MARKET TREND FOR TODAY

The Markets in yesterday’s session had to end with moderate losses despite positive opening and trading with capped gains for the half of the session as the news of possible price hikes in fuel proved a damper amid low volume participation as the Markets continued to form a very little higher top and bottom on the Daily High Low Charts.

Even today, the Markets are likely to open on a flat to mildly negative note and look for directions, in absence of any triggers on either side.

With the Markets expected to open on a flat to mildly negative note, the levels of 5590 and 5625 shall continue to act as resistance and  the levels of 5510 and 5480 shall continue to act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Charts is 39.6415 and is neutral as it shows no negative divergence or failure swings. The Daily MACD Continues to trade below its signal line.

It i s important at this point to note that there is absolute lack of participation of retail volumes and in case of markets weakening from higher levels, this is a  minor positive sign.

However, apart from possible fuel hikes, especially diesel which can have cascading effect on inflation, there is no other external negative factor. However, in the last three sessions, both FIIs and DIIs have remained net buyers and   there are no other triggers on the either side for the Markets.

All and all, in absence of any triggers, the Markets have continued to show potential reversals but will have to move past the levels of 5600 in order to confirm the potential reversals.

Until this happens, the continuation of stock specific approach with protection of profits at higher levels is advised as the lack of volumes remains a concern on back of lower retail participation. Cautious optimism advised.

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