Daily Market Trend Guide -- Friday, July 22, 2011

MARKET TREND FOR TODAY

The Markets yesterday continued to expectedly remain in corrective mode, though it traded in a capped range and on low volumes, but ended the day with moderate losses and in the process have formed a lower top and lower bottom on the Daily High Low Charts.

The Markets remained in consolidation mode and yesterday it has given a minor break down as it gave lower top and lower bottom and also dipped below its 100DMA.

For today, the Markets are likely to see positive opening despite technical weakness on back of positive closing of US Markets and prevailing positive Asian Markets.

With the positive opening expected in the Markets, the levels of 5570 and 5590 are likely to act as resistance and the levels of 5500 and 5760 are likely to act as supports.

The RSI—Relative Strength Index on the Daily chart is 49.2904 and it continues to remain neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bearish, trading below its signal line.

Having said this, even though the Markets may open strong and positive on back of global cues, the technicals, as it did in the past, are likely to take over and may resist the positive opening and the Markets may form the negative territory after opening and trading into positive initially.

The Markets have closed below its 100-DMA and now this level will act as resistance at Close. Also, the NIFTY Futures have shed Open Interest showing unwinding of the positions. In view of this, there are bright chances that Markets may come off its highs after attempting a positive opening and it may not capitalize on that.

All and all, it is advise again not to get carried away with the positive opening and observe the intraday trajectory it forms. Also, it is advised to continue with the stock specific approach while vigilantly protecting profits at higher levels. Stock specific cautious approach is advised as overall bias remains slightly negative. 

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