Daily Market Trend Guide -- Thursday, September 15, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets yesterday had an remarkable session, wherein, after spending the morning trade in a range bound volatile manner, it saw recovery in the later part of the day to end the day with decent gains, and in the process the Markets have formed higher top and similar bottom on the Daily High Low Charts.

For today, expect the Markets to open on a mildly positive note and look for directions, and the intraday trajectory shall continue to play critically important to decide the trend for today, along with the volumes.

With the Markets expected to open on a mildly positive note and trade positive at least in the initial trade, the levels of 5045 and 5090 shall act as resistance and the levels of 4980 and 4955 are expected to act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 45.9497 and continues to remain neutral as it shows no negative divergence or failure swings.

The Daily MACD continues to remain bullish as it trades above its signal line.

The Markets saw the recovery coming in on back of much higher volumes than the previous session, which, in a way is a positive sign for the Markets. Both FIIs and DIIs have remained net buyers in Equities.

The Markets have formed almost similar bottoms in last three sessions which shows the support coming in at these levels and after pullback from these levels, there is discomfort seen at these lower levels. Yesterday’s pullback has seen decrease in Open Interest in Nifty futures which indicates it was heavy short covering and this levels is likely to act as immediate support.

All and all, it is important to see if this short covering gets replaced with fresh longs. Until Markets reacts to RBI announcements yesterday, it is likely to remain in a range and also bit volatile. Overall, cautious  optimism is advised for today.

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