Daily Market Trend Guide -- Tuesday, October 04, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The yesterday’s session remained disappointing as the Markets opened gap down and remained so for the entire session moving in a very narrow 25-odd point range to end the day with losses and in the process have formed a sharply lower top and lower bottom on the Daily High Low charts.

Today, we may expect the Markets to open on a moderately flat note and look for directions and we can also expect the Markets to see some respite from the weakness that it saw in the last two sessions.

With the Markets expected to open today on flat to moderately mild note, the levels of 4810 and 4870 are likely to act as supports and the levels of 4895 and 4925 are likely to act as resistance on the upper side. Along with intraday trajectory that the Markets form, the volumes too would remain critical to decide the trend today.

The RSI—Relative Strength Index on the Daily Chart is 41.0800 and it shows no negative divergence or failure swing and is therefore neutral.

The Daily MACD has turned bearish as it has again reported a  negative crossover and it now trades below its signal line.

At this juncture, it becomes important to note two points. First, the Markets have been trading in a very broad trading range of 4720-5170. And within this range, it has been moving in either direction without any domestic triggers just recklessly following global cues. Also, the Markets have been showing total defiance to technicals and is “controlled” by few big FIIs. This is vindicated with the gap up and gap down opening and then trading around those levels for entire session. This clearly shows artificial trade pattern, wherein an analyst has very little to analyze. Also the volumes have been lower which is a positive sign for Indian Markets.

All and all, we again reiterate to refrain from shorts as no intraday gap/movement is expected. These levels may be used for selective purchases. Cautious optimism is advised as no structural breach on chart is reported.

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