Daily Market Trend Guide -- Monday, July 04, 2011

MARKET TREND FOR TODAY

The Markets on Friday, showed first signs of consolidation as it took a breather from the series of gaining sessions to end the day with moderate losses and in the process have still formed a higher top and a slightly higher bottom on the Daily High Low Charts.

Today’s session is likely to be somewhat similar to that of Friday’s session. On back of strong global cues, the Markets are expected to give a positive opening but are likely to consolidate / correct and this would largely depend upon the intraday trajectory that it shall form.

With the positive opening expected in the Markets today, the levels of 5670 and 5710 shall act as resistance and the levels of 5580 and 5530 are likely to act as immediate supports.

All lead indicators remain more or less in place. The RSI—Relative Strength Index on the Daily Chart is 61.8587 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade above its signal line.

On the Weekly Charts, the RSI is 51.1842 and that too is neutral as it shows no negative divergence or failure swings. The Weekly MACD however continues to remain bearish as it trades below its signal line.

Going by Chart Pattern Analysis, the levels of 5705 has a resistance by way of falling trend line on Weekly Charts that joins two previous tops. Furthermore, this levels is also the 50-DMA on the Weekly Charts. Further to this, on the Daily Charts, this level, i.e. 5705 has become an immediate top and further up move can be expected only after the Markets move past this levels.

All and all, the Markets are likely to consolidate / correct even after positive opening, largely depending upon the intraday trajectory that it forms. Further to this, it is strongly advised to maintain highly stock specific approach while vigilantly protecting profits at higher levels. High degree of caution is advised while taking fresh long positions. Overall, cautious approach is advised for today.

Milan Vaishnav, 

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