Monday, August 1, 2011

Daily Market Trend Guide -- Monday, August 01, 2011

MARKET TREND FOR TODAY

The Markets had a quiet and directionless session on Friday, wherein it opened below its critical resistance level of 50-DMA and that level remained its resistance for the rest of the day as the Markets ended the day flat with nominal losses, forming a slightly higher top but lower bottom on the Daily High Low Charts.

Today, following stable global cues, we can fairly expect a positive opening in the Markets and see some respite from the weakness that is persisting since last couple of sessions.

With the Markets expected to open on a positive note, it is expected to trade positive at least in the initial session.

For today, the levels of 5520 and 5545 shall act as resistance and the levels of 5440 and 5410 shall act as supports.

The RSI—Relative Strength Index on the Daily Chart is 43.4560 and it has reached its lowest value in last 14-days and this is BEARISH. It, however, does not show any negative divergence. The Daily MACD continues to trade below its signal line and is therefore bearish. On Candles, the Charts shows short term potential weakness. On the Weekly Charts, the RSI is 45.6723 and it does not show any negative divergence or failure swings and is neutral. The Weekly MACD is bullish as it trades above its signal line.

Again, as per Chart Pattern Analysis, it has a Descending Triangle Formation which a similar bottoms and falling tops, which is potentially bearish if the NIFTY breaks below 5200. Thus, keeping the above mixed and contrary readings on Daily and Weekly Charts, the Markets are fairly expected to remain in a broad range of 5225 on the lower side and 5520 on the upper side. For today, with the positive opening expected it would be critically important for the Markets to remain in positive intraday trajectory to capitalize on its positive opening. If it fails to do so, we may again see the Markets either trading in a range or drifting lower. Thus, it is still advised to continue with cautious approach even with positive opening and maintain cautious stock specific approach for the day.

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

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