Daily Market Trend Guide -- Monday, September 19, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets saw a volatile session, trading in a 60-point range, going in both  the directions violently reacting to the RBI Rate announcements and finally ended the day with nominal gains and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a lower / negative note and look for directions. The levels of 5170 have continued to act as an immediate resistance and this continue to act so in near term.

For today, with the Markets expected to open on a negative note, the intraday trajectory that it forms post opening would be critically important to decide the trend for today, as well as coming week.

Today, with negative opening expected, the levels of 5100 and 5140 and 5170 shall act as resistance and the levels of 5050 and 5010 shall act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 50.3695 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it continues to trade above its signal line.

On the Weekly charts, the RSI is neutral at 41.0305 without showing any negative divergence or failure swing. The Weekly MACD remains bearish as it trades below its signal line.

Given this reading, the Markets are expected to remain volatile in a capped range. Further to this, the level of 5177 is also a similar pattern resistance on Weekly Charts, like the levels of 5170 on the Daily Charts. Having said this, the markets are likely to have a  confirmed reversal only after it moves past the levels of 5170, though it has made a higher bottom post forming a low.

All and all, stock specific actions will continued to be witnessed. Traders are advised to remain highly selective and keep protecting profits on either side though the trend remains intact. Resilience may be seen from the Markets today. Positive caution is advised.

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