MARKET TREND FOR TODAY
The Markets had a extremely volatile session as it moved over 130-points intraday to end the day with modest gains. The Markets opened on a positive note and after initial sluggish move, pulled back sharply. It gained over 80-odd points from the previous close. Just when it seemed that we are seeing a much overdue pull back, it pared all of its gains. It recovered a bit again to end the day with modest 0.48% of gain and in the process have formed almost a parallel bar on the Daily High Low Charts.
Today, we are again set to see a sluggish direction-less session, but with a positive bias. Today, expect the Markets to open on a mildly negative note and look for directions and again, like yesterday, the intraday trajectory that it forms as well as the volumes will play a critical part in sustaining any effort of a pullback.
For today, the levels of 5090 and 5145 shall act as resistance levels and the levels of 5015 and 4980 shall continue to act as supports.
All lead indicators continue to point towards a over due pullback. The RSI--Relative Strength Index on the Daily Chart is 29.8291 and is neutral as it shows no negative divergence or failure swings. However it continues to trade in OVERSOLD zone. The Daily MACD trades below its signal line.
Also, the NIFTY Futures have added 1080150 shares or 4.59% in Open Interest which indicates creation of short positions.
Having said this, with some amount of short positions seen and with the lead indicators continuing to trade OVERSOLD, it is advised to refrain from taking any short positions in the Markets. It is best advised to maintain liquidity and protect positions and make selective purchases as the Markets definitely trades with a pullback now long overdue. Positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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