Daily Market Trend Guide -- Thursday, September 22, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a quiet session yesterday as after opening flat and after trading with modest gains, the Markets chose to consolidate and it ended the day with negligible losses and in the process have still formed a higher top and higher bottom on the Daily High Low Charts. The Markets yesterday gave intraday high of 5168.40 and thus, again resisted to the levels of 5170 and thus this levels have become an immediate top for the Markets.

For today, expected the Markets to see a gap down opening on back of global weakness arising out of the world not taking the FED Announcements made overnight in the US. This has resulted into US Markets ended lower and the reaction being extended in the Asian Markets as well. Following this, the Indian Markets too is expected to open on a gap down note. With this, the levels of 5050 and 5010 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 53.2905 and is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to remain bullish as it trades above its signal line.

Having said this, it is important to note the following. The Markets, as of today, are still in the Ascending Triangle with the levels of 5170 acting as multiple top resistance. The Markets have formed higher bottoms as of now. Also important to note that any opening and trading near 5050-5035 levels will still keep the Markets still within critical support levels. Statistical inputs also show this range as a strong support. Also, it is important to note that any turmoil in the Global Markets will ultimately divert monies to Emerging Markets and thus, India, which has underperformed its peers is likely to show some resilience. Thus, keeping all this in view, we may see a gap down opening, but the opening can be near the support levels and there are chances that Markets may not break further or go down very little post opening and may attempt to improve as the session progresses. Keeping all this in mind, it is strongly and best advised that attempt of bottom hunting and also shorts should be avoided and liquidity should be maintained to protect positions. Cautious outlook is advised for today.

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