Daily Market Trend Guide -- Thursday, July 28, 2011

MARKET TREND FOR TODAY

The Markets saw weakness persisting weakness following RBI’s aggressive stand with the more than expected rake hikes, as the Markets continued to end the day with losses and in the process have formed sharply lower top and lower bottom on the Daily High Low Charts.

Today, expect a weak and negative opening in the Markets following weak global Markets and persisting technical weakness. Today, the Markets 50-DMA levels of 5518 would play a critical role in deciding the trend for the day.

Today, it would be critical to see that in case of weaker opening, the Markets opens below or above the levels of 5518 as in case of opening below this levels, this level may continue to act as resistance for the rest of the day. Below this, the support exists at 5475 levels.

The lead indication show that the weakness in Markets may continue to persist. The RSI—Relative Strength Index on the Daily Chart is 48.0029 and this is reached the lowest value in last 14-days which is BEARISH. Also, RSI has set a new 14-period low whereas NIFTY has not yet, and this is BEARISH DIVERGENCE.

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

Today is the expiry day of the  current derivative series and thus, we may see the session remain heavily dominated with roll over centric activities. This may keep the Markets little volatile.

Further to this, even with rollovers, both NIFTY and Stock Futures have shown net decrease in total Open Interest which supports weak technicals.

All and all, in even of Markets opening or breaching the levels of 5518 is likely to make the Market weaker and increases the probability of taking it to next indicative support at 5475. On the upside, it has resistance of its 100-DMA at 5581. Overall, range bound or weak trading day expected today. Continuation of stock specific approach with vigilant protection of profits is advised for today. 

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