Daily Market Trend Guide -- Wednesday, September 21, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a wonderful session yesterday wherein it witnessed all round buying on back of favorable technicals and positive global cues and ended the day with robust gains. The Markets have, in the process, formed a sharply higher top and higher bottom on the Daily High Low Charts.

Today, expect the Markets to open on a flat to mildly negative note and consolidate in the early trade. Today, the Markets are critically poised and its behavior today shall determine its trend for today as well as for coming sessions.

Today, with the Markets expected to open on a flat to mildly negative note, the levels of 5170 and 5231 in the form of 50-DMA shall continue to act as resistance and the levels of 5105 and 5070 are expected to act as supports. The consolidation of the Markets in the initial trade cannot be ruled out.

All lead indicators point towards continuation of up move after brief consolidation. RSI—Relative Strength Index on Daily Chart is 53.7515 and it has reached its highest value in last 14-days, which is BULLISH. Also, the RSI has set a new 14-day high whereas NIFTY is yet to do so. This is BULLISH DIVERGENCE.

The Daily MACD continues to trade above its signal line and is therefore bullish.

The Markets, even after yesterday’s up move are still ruling below 517 levels and is still within the Ascending Triangle Formation and are yet to break out from it. A sustainable break out shall occur only after the Markets moves past this levels and trades above that.. Since the Markets are yet to move past this levels, there are chances that it opens mildly negative and consolidates in the initial trade and thus, the intraday trajectory that it forms shall continue to remain critically important.

All and all, apart from possible minor consolidation which may keep the Markets bit volatile, the overall trend still has positive bias left. Thus, it is advised to remain stock specific avoiding shorts. Overall, positive outlook is advised for today.

Milan Vaishnav,

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