Daily Market Trend Guide -- Thursday, October 13, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a strong session yesterday as it ended the day with robust gains though remaining quite volatile during the day post reacting to IIP numbers. The Markets continued to give a sharply higher top and higher bottom on the Daily High Low Charts.

The Markets are expected to continue from where it left yesterday and continue with its up move at least in the initial trade but they are equally likely to consolidate at these levels.

For today, expect the Markets to open on a moderately positive note and will look for directions post opening. There is possibility that after opening on a moderately positive note, it may form a sideward or falling trajectory and may consolidate.

For today, the levels of 5120 and 5145 are likely to act as resistance and the levels of 5034 and 5005 shall act as supports.

The RSI—Relative Strength Index on the Daily Chart is 56.3520 and it has reached its highest value in last 14-days. However, it does not show any positive or negative divergence.

The Daily MACD continues to remain bullish as it trades above its signal line.

Having said this, it is still very important to note that the Markets continue to remain in a original broad trading range of 5170 on the upper side and 4730 on the lower side and though it may have made a remarkable pullback on expected lines, it is still to make any pattern breakout on the upside, which shall occur only after the Markets moves past the levels of 5170 comprehensively with good volumes.

All and all, the Markets have given a pullback of 368-odd point from its day’s low couple of sessions back and the possibility of consolidation around these levels cannot be ruled out. Also, along with fresh buying, lots of short covering was also seen, adding to the possibility of consolidation today. It is thus advised to remain highly stock specific in taking longs and vigilantly protect profits at higher levels. Cautious outlook is advised for today.

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