Daily Market Trend Guide -- Thursday, September 08, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

Though on low volumes, the Markets continued with its up move yesterday and remained in the rising trajectory for the entire session. It did come off its lows but still managed to end the day with decent gains and in the process forming a higher top and higher bottom on the Daily High Low Charts.

Today, we are likely to witness a session wherein the Markets are likely to consolidate. The Markets are likely to open on a flat note and are likely to remain in a very capped range and consolidate after decent pullback from its recent lows.

The Markets have resisted yesterday near the levels of 5170 mentioned in our yesterday’s edition of Daily Market Trend Guide. This is the Double Bottom support that the Markets broke while coming down and this likely to remain a temporary resistance until the Markets moves past this levels. The behavior of the Markets vis-à-vis this level would be critically important for the Markets to continue with its sustainable up move.

The RSI—Relative Strength Index on the Daily Chart is 51.1515. It does not show any negative divergence but the RSI has reached its highest value in last 14-days, which is Bullish. The Daily MACD continues to trade above its signal line and is bullish. On the Candles, A Rising Window has occurred. This usually implies continuation of Bullish trend.

The Markets have seen a pullback of almost 434 points from its days low in last couple of sessions. The NIFTY September future Open Interest remain virtually unchanged with the discount increasing to 7-points from 3-points. This implies minor addition of shorts along with long positions on very small scale.

All and all, with the levels of 5170 acting a immediate resistance, the Markets are likely to consolidate in a broad range of 4960-5170 levels. Intraday trajectory would continue to remain critically important. It is strongly advised to remain highly selective while picking stocks while vigilantly protecting profits at higher levels. Overall trend remains intact.

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