Daily Market Trend Guide -- Thursday, June 23, 2011

MARKET TREND FOR TODAY

The Markets had a quiet and directionless session yesterday with it moving in either direction after paring the early morning gains and finally ended the day with a meager gain of 2.45 points, forming a parallel bar with a slightly lower top but higher bottom on the Daily High Low Charts.

Today, it is likely to be no different. The Markets are expected to open on a flat and subdued note and again look for directions. This time, along with the intraday trajectory that the Market forms, the volumes too would be critical as the yesterday’s session was completely devoid of volumes that failed the Markets to capitalize on the positive opening.

For today, with the Markets expected to open on a flat ad subdued note, the levels of 5325 and 5380 shall act as resistance and the levels  5225 and 5200 are likely to act as supports. 

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 31.9505 and is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to trade below its signal line.

Given this reading, the Markets have accumulated after giving a steep fall two days back after reacting to DTA news.  Technically speaking, as per the Chart Pattern Analysis, this is not a strong sign if the Markets accumulated on the lower side after the fall. However, given the RSI reading, though the down side may be limited, it would be extremely critical and important for the Markets to move past the levels of 5325 to successfully attempt a technical pullback, still continuing to remain in overall downtrend. Apart from this technical reading, the NIFTY Futures have been constantly adding open interest. FIIs too have been reported net buyers in Futures Segment. There are chances that we may see a pullback due to this combined reading, but sooner the Markets moves past 5325-5330 levels, the better. Until this happens, extremely cautious and stock specific approach is advised, still continuing to avoid shorts as the downside remains limited. Positive caution is advised for today.

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