Daily Market Trend Guide -- Wednesday, June 22, 2011

MARKET TREND FOR TODAY

Though the Markets did attempt a pullback yesterday, it pared most of its gains in the second half of the session to end the day with modest recovery and in the process have formed a lower top and a higher bottom on the Daily High Low Charts.

For today, expect the Markets to be in recovery mode again and open on a positive note and trade in the positive, at least in the initial trade.

With the markets expected to open on a positive note, the intraday trajectory it forms would be critical for the Markets to help sustain and capitalize on the expected positive opening.

For today, the levels of 5320 and 5360 are expected to act as resistance and the levels of 5280 and 5255 are expected to act as support.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 31.6322 and is neutral as it does not show  any negative divergence or failure swing. However, it has move above its OVERSOLD range and has thus given a buy signal. The Daily MACD continues to trade below its signal line.

On the Candles, A Spinning Top has occurred. This is irrelevant as it has occurred near the low price levels.

As per the Chart Pattern Analysis, even if we continue to remain in the overall downtrend, the Markets are likely to give a technical pull back at least in the range of 1-2%. This likelihood is further supported by the F&O data which has shown NIFTY adding Open Interest since last couple of sessions and clear discomfort at lower levels.

In support of this technical reading, the positive opening will be further supported with the stable and positive global markets, however, as said earlier, intraday trajectory would  be critically important for the Markets to capitalize on the possible positive opening. It is advised to maintain stock specific outlook. Fresh purchases may be made while protecting profits at higher levels. Positive caution is advised  for today while avoiding shorts.

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