MARKET TREND FOR TODAY
As we have been mentioning in previous editions of Daily Market Trend Guide, domestic favorable technicals, which have been in OVERSOLD zone for couple of day offered resilience to global weakness as the Markets closed just moderately down after recovering over 200-odd points from its opening lows. It has, however continued to form a lower top and lower bottom on the Daily High Low Charts.
Finally, today, we are likely to see some technical pullback which has been long overdue following favorable technicals as well as global cues.
Today, expect the Markets to open on a stronger note and trade in positive in the initial trade. The Markets are expected to further strengthen, however, the intraday trajectory that it forms would be critically important. The levels of 5030 and 5175 shall act as resistance and the levels of 5020 and 4980 shall act as supports.
The RSI—Relative Strength Index on the Daily Chart is 24.8269 and is in OVERSOLD zone. Though it has reached its highest value in last 14-days, it shows no negative divergence. The Daily MACD continues to trade below its signal line. On the Candles, there is no sign of further potential weakness as general pattern now remains bullish. The Big White Candle has lent credibility to the support area.
Given the OVERSOLD technical indicators and favorable global cues, we are likely to see a technical pullback today, and the strength, as said above shall depend upon the intraday trajectory that the Market forms. The levels of 4950 has now become immediate support and on the upside, the levels of 5250 may act as resistance
All and all, the Markets are likely to remain in broad range of 4950 on the lower side and 5250 on the upper side with the fresh up move coming in after the Markets moves past those levels. Today, we are likely to see pull backs across the stocks as most of the stocks as well as NIFTY components remain in OVERSOLD zone. Cautiously positive outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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