The Markets yesterday continued with its corrective activity and continued to shed its gains as it ended the day with losses while reacting to weak Infosys numbers and worse-than-expected IIP numbers and above all weak Technicals. It continued to form a sharply lower top and lower bottom on the Daily High Low Charts.
Today, we might see some respite from the downtrend that we have been seeing. Today, we can expect the Markets to open on a positive note and trade positive, at least in the initial trade. However, it would be critically important for the Markets to remain in positive rising trajectory in order to capitalize on its positive opening.
With the Markets expected to open on a positive note, the levels of 5575 and 5605 shall act as resistance and the levels of 5500 and 5480 are likely to act as resistance.
The RSI—Relative Strength Index on the Daily Chart is 48.2339 and is neutral as it does not show any negative divergence or failure swings.
The Daily MACD is still bullish as it continues to trade above its signal line. On the Candles, the pattern remains bearish due to formation of A Falling Window.
Having said this, the Markets have taken intraday support yesterday at its 50-DMA and it would be critically important for the Markets to continue remain and trade above the levels of 5500. The FIIs have remained net buyers yesterday in Cash Segment and lots of shorts have been seen being created in NIFTY Futures as OI has increased with the fall. All and all, we may see positive opening today and an attempt of technical pullback. However, we still remain in overall falling channel and thus all profits should be protected at higher levels. Though intermittent short covering may not be ruled out, there wont be any reversal of trend until the Markets move past 5750. So, even though technical pullback occurs, very stock specific purchase may be made while protecting profits at higher levels. Cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com
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