Daily Market Trend Guide -- Monday, June 20, 2011

MARKET TREND FOR TODAY

The Markets on Friday continued its bearish undertone for third day in a row to end the day with modest losses and in the process have continued to form a lower top and lower bottom on the Daily High Low charts.

For today, we are likely to see a flat to mildly positive opening in the Markets and it is expected to trade in a capped range at least in the initial trade. Today, with the Markets expected to open on a flat to mildly positive note, the intraday trajectory that it forms shall continue to remain critically important for today’s trend. The levels of 5400 and 5436 shall continue to act as resistance and the levels of 55440 and 5320 shall act as important support in form of Double Bottom on the Daily Charts.

The lead indicators continue to show some weakness, though they are moving towards being Oversold. The RSI-Relative Strength Index on the Daily Chart is 36.0317 and it shows no negative divergence. Since it has reached its lowest value in last 14-days, This is a Bearish Indication. Same is the case with RSI on the Weekly Charts too. The Daily MACD continues to trade below its signal line.

Having said this, it is important to note that the Markets are resting at important support levels of 50-DMA on its Weekly Charts with the support coming in at 5340. Also, the advance tax numbers that have come in are far better than expected which have negated the slow down fears to larger extent. Furthermore, in last couple of sessions, the Markets have went on to add significant amount of Open interest which shows heavy creation of shorts at this levels. All and all, it is thus continued  to be advised to remain ultra cautious before going shorts as a pull back can be seen. Markets are likely to continue to remain in a range and bit volatile. Adopting very stock specific approach with positive optimism is advised for today.

  

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