MARKET TREND FOR TODAY
The Markets had a disappointing session again with it failing to capitalize on its positive opening as it again pared all of its opening gains to end the day with losses forming a lower top and lower bottom on the Daily High Low Charts.
Today, we are likely to see flat to subdued and mildly negative opening in the Markets but there are technical indications that the Markets may improve as the session progresses.
The Markets are expected to open flat to mildly negative and are likely to improve, but again the volumes and in the intraday trajectory that it forms would play a critically important role as the Markets shall need both — good participation as well as positive intraday trajectory.
For today, the levels of 5080 and 5140 shall act as resistance an the levels of 5005 and 4980 are likely to act as supports.
The RSI—Relative Strength Index on the Daily Chart is 27.8399 and it is now trading in OVERSOLD zone and it does not show any failure swings. The NIFTY has set a new 14-day low but the RSI has not. This is BULLISH DIVERGENCE.
The MACD continues to trade below its signal line but is too is moving towards being OVERSOLD.
Having said this, in yesterday’s session, the NIFTY futures premium of 5-points got transformed into discount of 2-points and with this, the NIFTY Futures have added over 13% in Open Interest signifying big addition of short positions in the Markets. Further to this, with the lead indicators trading OVERSOLD with bullish divergence, we are all likely to find bottom at these current levels and see some technical pullback which has been long overdue.
All and all, even in case of temporary weakness, it is strongly advised to refrain from taking any short positions. Stock specific activities are likely to continue. While some selective buying may be done, it is advised to maintain vey selective stock specific cautiously positive outlook for the day.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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