Daily Market Trend Guide -- Monday, July 25, 2011

MARKET TREND FOR TODAY

The Markets on Friday, saw a huge spate of short covering as it ended the day with decent gains, forming a higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a mildly negative note and look for directions. Along with the intraday trajectory that it forms, the volumes too are expected to play critical part in deciding trend for today.

With the Markets expected to open on a mildly negative note, it is most likely to it trades in a range remaining intermittently volatile as it continues to remain in overall falling channel.

For today with negative opening expected, the levels of 5660 and 5675 are expected to act as resistance and the levels of 5580 and 5560 are expected to come in as supports.

The RSI—Relative Strength Index on the Daily Charts is 55.85 and is neutral as it shows no negative divergence or failure swings. The MACD continues to remain bearish as it trades below its signal line.

On the Weekly charts, the RSI is 51.3412 and it remains neutral without showing any negative divergence or failure swing. The Weekly MACD trades above its signal line.

As per the Chart Pattern analysis, the Markets still continues to trade below its falling channel / trend line drawn from its life time highs of 6335,  and joining the tops thereafter, both on the Daily as well as weekly charts.. Also, as per the F&O figures, the NIFTY futures have shed total open interest showing more of a short covering rather than fresh buying. Thus, as mentioned in previous session of our Daily Market Trend Guide, the Markets will need a trend reversal for a sustainable up move and this is expected to occur only after the Markets moves past and sustains above the levels of 5670-5720. The Markets may remain volatile and in a range until then. All and all, until this happens, it is advised to continue to remain stock specific and continue to vigilantly protect profits. A stock specific approach with cautious outlook is advised for today. 

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