Daily Market Trend Guide -- Friday, October 14, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets traded yesterday almost in line with the analysis carried out as it opened positive, made a intraday top and transformed itself into negative falling trajectory to end the day with nominal losses  while continuing to consolidate. In this process, the Markets have continued to form a lower top and lower bottom on the Daily High Low charts.

Technically speaking, since the Markets have ended the day near the low point of the day, it is expected to open on a moderately lower note and trade negative in the early trade while looking for directions and heavily depending upon the intraday trajectory that it shall form in the early trade.

For today, thus, expect the Markets to open on a moderately low to flat note and trade in a range in the initial trade. For today, the levels of 5105 an 5130 are expected to act as resistance while the levels of 5050 and 5026 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 55.0874 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bullish as it trade above its signal line.

Having said this, it is important to note that, as often pointed out in our previous editions of Daily Market Trend Guide, the Markets still continues to remain in range and meaningful and sustainable rally shall occur only after the Markets moves past the levels of 5170. Further, in the yesterday’s session, the Markets (Nifty) has shed some 5% in open interest  which shows some unwinding has been done from higher levels. However, as against this, the FIIs have remained net buyers in Cash Segment. All and all, from all that is mentioned above, it is clear that Markets will see some easing or at least  continue to see some consolidation from these levels and the upside is expected to remain capped. It is thus advised to remain highly stock specific while initiating longs and keep protecting profits vigilantly at higher levels. Volatility shall remain. Overall, cautious outlook is advised for today.

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