Daily Market Trend Guide -- Friday July 29, 2011

MARKET TREND FOR TODAY

The Markets yesterday opened below its 50-DMA on expected lines following weak global cues and even weaker technicals and never recovered during the day and ended yet another day with losses and in the process have formed a sharply lower top and bottom on the Daily High Low Charts.

Technicals continue to remain weak for the Markets. Adding to this woes, weak global cues can cause the Markets to open again on a weaker note today and look for directions.

Today, thus, expect the Markets to open on a weaker note and look for directions.

With the Markets expected to open on a weaker note, the levels of 5440 and 5390 are to act as supports on the lower side. The levels o 5480-5525 are expected to act as resistance on the upside.

The lead indicators continue to point towards continuing weakness. The RSI—Relative Strength Index on the Daily Charts is 43.8503 and it has lowest value in last 14-days which is BEARISH. However, it does not show any negative divergence.

The Daily MACD continues to remain bearish trading below its signal line.

On Candles, A Falling Window occurred. This usually applies continuation of a bearish trend. Two candles preceding the falling window were black which makes the pattern even more bearish.

The Markets have a minor pattern support around 5435 and it would be critically important to see if the Markets takes support around this level after weak opening. It is likely to take momentary support at this levels.

All and all, the key lies to see the Markets taking support or not around the mentioned levels post opening. With today’s negative opening, Markets would have pared over 250-point from intraday high since 26th. Thus, some volatility and intermittent pullbacks cannot be ruled out. However, overall view on the Markets remains bearish. Cautious, stock specific outlook is advised for today. 

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