MARKET TREND FOR TODAY
The Markets saw a volatile session on Friday wherein it consolidated moving in either direction and finally ended the day with modest gains in a session that witnessed very low volumes. In the process, the Markets have continued to form a higher top and higher bottom on the Daily High Low Charts.
Again today, we face a sharp contradiction in domestic technical indicators and global cues. While global cues represent weakness, all technical indicators point towards continuing pullback. However, the Markets are expected to take a middle path.
This means, expect the Markets to open on a negative note following weak global cues but later in the day, also expected it to recover as technicals are expected to take over and the Markets expected to show resilience. For today, the levels of 5060 and 5095 are expected to act as resistance and the levels of 4990 and 4960 are expected to act as supports.
All lead indicators point towards pullback to continue. The RSI — Relative Strength Index on Daily Chart is 45.7266 and it has reached its highest value in last 14-days which is BULLISH. Also, RSI has given a new 14-period high, whereas NIFTY has not as yet. This is BULLISH DIVERGENCE. The Daily MACD has reported a positive crossover as it now trades above its signal line. On the Weekly Charts too, RSI is 39.4384 and has move out from bottoming out zone, which is a good sign. Further, Weekly MACD trades below its signal line but is now in OVERSOLD range.
FIIs and DIIs have remained net buyers in both Cash as Derivative segment.
However, volumes have remained a concern. Thus, given the above reading, the most likely scenario can be that Markets may open down following global weakness but may show resilience and recover as the day progresses as overall technical view remains on the continuation of pullback. While it is advised to keep protecting profits at higher levels, it is strongly advised to avoid shorts. Cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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