Tuesday, June 7, 2011

Daily Market Trend Guide -- Tuesday, June 07, 2011

DAILY MARKET TREND GUIDE

The Markets ended the day yesterday on a positive note after it reversed its trajectory in the second half of the trade. The Markets opened on a moderately negative note, but ended the day with modest gains but as expected the volumes remained a concerned as they were lower than average, and in the process, the markets have formed a lower top and lower bottom on the Daily High Low Charts.

Today is going to be no different than yesterday. The Markets are expected to open on a moderately negative note and will look for directions depending as usual on the intraday trajectory that it forms and the volumes. With the Markets expected to open on a moderately negative note, the levels of 5575 and 5605 shall continue to act as resistance and the levels of 5505 and 5480 shall continue to act as supports.

The lead indicators too point towards no direction. The RSI--Relative Strength Index on the Daily Chart is 49.8557 and it shows no negative divergence or failure swings and is therefore neutral. The Daily MACD is bullish as it trades above its signal line.

Though FIIs have remained net sellers in F&O segment on a small note, the overall Open Interest has increased with the NIFTY premium dropping to 2 points from 6 points. This again indicates creation of short positions. Given this reading with the above mentioned technical reading, the markets are likely to remain range bound and are likely to trade in a range, bit volatile and on lower volumes. However, the bias remains on the upside.

In light of this, like yesterday, we continue to advise to refrain from creating naked shorts and use the weakness to make very stock specific purchases and the action would largely remain stock specific. With no triggers on the either side, a cautiously optimistic approach is advised for today.

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

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