Daily Market Trend Guide -- Friday, October 07, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a very volatile session moving 50-60 odd points in either direction twice as it ended the day with moderate losses ahead of a trading holiday yesterday and in the process have formed a lower top but slightly higher bottom on the Daily High Low Charts.

However, the volumes on Wednesday have remained dismally low which is, is  fact, a positive sign as it indicates less participation in the consolidation stage.  The Markets have, so far, held the support levels in the range of 4720-4740 in the form of triple bottom.

For today, expect the Markets to open on a strong note and continue to remain so in the morning session. In order to capitalize on the positive opening, the Markets will have to open on a stronger note and thereafter, sustain its positive trajectory and will have to be supported with volumes.

The RSI—Relative Strength Index on the Daily Chart is 36.9934 and it has reached its lowest value in last 14-days, but it does not show any negative divergence. The MACD on the Daily Chart is bearish as it trades below its signal  line, but is moving towards giving a positive crossover again.

The Markets have shed very nominal open interest which shows no significant unwinding has been done. Also, the Markets have held the triple bottom supports of 4720-4740 three times and this has now become immediate supports for the Markets.

Further to this, the low volumes in last two sessions have further brightened the return of stability and some pullback today as there have been minimal participation in the Markets.

All and all, given the very much favorable technicals and supported by positive global cues, the Markets are set to open on a stronger note and remain so for the rest of the session critically depending on the trajectory as well as the volumes. Stock specific purchases will continued to be seen. While protecting profits at higher levels, positive caution is advised.

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