The Markets staged a strong up move yesterday after a steady and quiet start and ended the day with robust gains and in the process have formed a sharply higher to and higher bottom on the Daily High Low Charts.
Today, would be a critical session of the Markets as it has closed yesterday near two of its important and major resistances.
Today, expect the Markets to open on a positive note following positive global cues and trade positive at least in the initial session. Thereafter, it would be very critical to see what trajectory it forms in the early session, coupled with the volumes.
Today, with the Markets expected to open positive, 5750 and 5770 shall act as resistance and the immediate supports are expected to come in at 5680 and 5610.
The RSI—Relative Strength Index on the Daily Chart is 67.3596 and it does not show any negative divergence. It has reached its highest value in 14-days and this is bullish. The Daily MACD continues to trade above its signal line.
At this juncture, we need to draw your attention to two important factors. There is a falling trend line drawn from the NIFTY’s lifetime highs of 6335, and joining the subsequent lower tops at 6181 and 5906, poses a resistance to the Markets around 5700 levels. The Markets have closed a notch above this but apart from the above pattern resistance, the 200 DMA of the Markets is at 5743, which again is a major resistance. Also, as per the F&O Data, the FIIs have indulged into huge short covering yesterday.
All and all, the conclusion can be drawn that the Markets will have to move past and Close above its 200 DMA in order to move out of the falling channel and also the resistance of 200 DMA. It is advised to exercise caution until this levels are passed and not to get carried away with the up move that occurred yesterday. Continuation of stock specific approach with protection of profits and cautious outlook is advised for today.
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com
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