Daily Market Trend Guide -- Tuesday, September 27, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a highly volatile session yesterday, wherein it ended the day with moderate losses, even after a big attempt to recover from its day’s low. In this process, it has continued to form a lower top and lower bottom on the Daily High Low Charts.

For today, expect to see the respite from the weakness that we have been seeing. Taking cues from favorable technicals and supportive global cues, expect the Markets to open on positive note and trade in the positive, at least in the initial trade.

The Markets are expected to open on a positive note and its trend for today as well as for coming session would critical depend upon the levels of 4780 which is a trend line support and the levels of 4920 which is a major Double Bottom Support. For today, with the levels mentioned above acting a major and strong support range, the levels of 4890 and 4965 may act as resistance.

The RSI—Relative Strength Index on the Daily Chart is 37,8384 and it has reached its lowest value in last 14-days which is bearish, but it shows no negative divergence. The Daily MACD has just reported a negative  crossover and it is turned bearish as it now trades below its signal line.

Having said this, we need to take into consideration, the following. The Markets have taken a strong support twice in the important pattern support rage mentioned above from where the Markets have rebounded twice. Having said that, we have seen the up move coming in yesterday from a huge bout of short covering. Having said this, it would be necessary to see that this short covering gets converted into buying. In fact, come amount of long rollovers were seen into the next series as we have entered into expiry week.

All and all, with the Markets showing resilience near the mentioned support zone, it is likely that we continue with the recovery today as stock specific purchases may likely to be seen. While continuing to avoid shorts, positive outlook is advised for today.

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