MARKET TREND FOR TODAY
The Markets had a range bound session yesterday as it did not move on either side. It showed remarkable resilience to the weakness in US Markets and at the same time, did not react positively either to the strong opening of the European Markets and ended the day with modest losses and in the process have formed a slightly lower top and lower bottom on the Daily High Low Charts.
Finally, today, we are likely to see some respite from the volatile weakness that we have been experiencing post US downgrade.
Today, Markets are expected to open on a positive note and trade in the positive at least in the initial hour. This gains is likely to strengthen, however, intraday trajectory would be important for the Markets to capitalize on the positive opening. These favorable technicals are going to be aided with positive global cues.
For today, the levels of 5170 and 5230 are likely to act as resistance and the levels of 5120 and 5075 are likely to act as supports.
The RSI—Relative Strength Index on the Daily Chart is 31.7551 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line.
The Markets have more or less discounted the negative global news. The levels of 5170-5177 is one of the double bottom that the Markets broke on its way down and so, this might act as a minor resistance.
The F&O data shows minor open interest addition. This suggests that short covering was done in the previous session but since yesterday, slowly these are now being replaced with fresh longs.
All and all, positive day likely ahead. It is advised to still avoid any shorts at higher levels and keep protecting profits on open positions at higher levels as vigilant protection of profits is advised. Stock specific activities would continue. Positively cautious, selective approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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