MARKET TREND FOR TODAY
The Markets had a session which was very visible dominated with rollover centric activities as the Markets remained volatile, moved in either directions and finally ended the day with losses and in the process have formed a lower top and lower bottom on the Daily High Low Charts.
Today, we would see the Markets opening on a flat note and look for directions while continuing to depend upon the intraday trajectory that it forms.
With the Markets expected to open on a flat note, the levels of 4890 and 4930 are expected to act as resistance and the levels of 4810 and 4780 are likely to act as supports.
The lack of triggers on the global front may contribute to global opening but local technicals again point towards possibility of the Markets taking supports at the levels mentioned.
The RSI—Relative Strength Index on the Daily Chart is 27.6491 and it continues to trade in OVERSOLD zone without showing any failure swings. The NIFTY has given a new 14-day low but the RSI has not and this is BULLISH DIVERGENCE.
The Daily MACD continues to trade below its signal line but has flattened out and is improving.
Further to this, the domestic Markets have been grossly underperforming in recent past than its Asian peers. Given this, the technicals, as mentioned above again indicates that the Markets may take support at these levels and attempt yet another pullback. The levels of 4810-4780 continue to remain a major Double Bottom Support and the Markets are likely to continue to trade in a broad range of 4800-4970. A confirmed trend reversal would occur only after the Markets moves out this range.
All and all, limited downside seen given the OVERSOLD lead indicators. However intermittent bouts of volatility cannot be rules out. Continuation to stock specific outlook with positive caution is continued to be advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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