Daily Market Trend Guide -- Tuesday, August 23, 2011

MARKET TREND FOR TODAY

The Markets yesterday saw a session with relatively low volumes but set some stage for potential bottom formation as it ended the day with modest gains even after spending the day with volatility and little lack of conviction, which was seen due to lower volumes. The Markets ended the day at 4898.80, posting a gain of 53.15 points or 1.10%.

Today, we can expect the Markets to open on a positive note and look for directions. The Markets are expected to open on a positive note and trade positive at least in the initial trade backed by favorable Technicals. The quantum of gains and to the extent to which Markets would be able to capitalize on such favorable technicals would continue to critically depend upon the intraday trajectory that the Markets forms as well as the volumes.

For today, the levels of 4940 and 4975 shall act as resistance and the levels of 4860 and 4845 are expected to act as supports.

The RSI--Relative Strength Index on the Daily Chart is 27.3142 and is neutral as it shows no negative divergence or failure swing. Also, it continues to remain in OVERSOLD range.

The Daily MACD trades below its signal line but that too now trades in OVERSOLD zone.

On the Candles, An Engulfing Bullish Line has occurred. An Engulfing Bullish pattern is BULLISH during a downtrend which is the Case with NIFTY. It signifies a potential trend reversal and it signifies shifting of momentum from bears to bulls.

All and all, the session is likely to remain on positive note and it is advised to make selective purchases while holding on the current positions. As we are into expiry week, we may see the session also slightly dominated with rollover centric activities. Overall, cautious but positive outlook is advised for today.

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