MARKET TREND FOR TODAY
The Markets had a disappointing session on Wednesday as the Markets chose to play safe amid European uncertainties and shed some weight in the last hour of the trade as yesterday was a trading holiday and ended the day with losses and in the process higher top but lower bottom on the Daily High Low Charts.
Today, we can expect stability to return to the Markets and the Markets are expected to open on a flat to mildly positive note and trade positive at least in the initial trade. The Markets are likely to take support near the previous lows but the intraday trajectory would be extremely important today not only to decide the trend for today but for coming days. The US and the European Markets have rebounded from the intraday lows yesterday and the favorable technicals are likely to support the stability that is expected to return. The levels of 5220 and 5190 are likely to act as supports today.
All lead indicators still continue to remain in place. RSI—Relative Strength Index is at 51.9293 and is neutral as it shows no negative divergence or failure swing and Daily MACD continues to remain bullish as it trades above its signal line.
The reading of the Charts is very clear. We have been mentioning about falling trend line drawing from life time highs of Nifty from 6338 levels joining falling tops of 5944, 5600, and this has posed resistance to the Markets around 5310 levels. On the other side, the Markets have taken support at its 100 DMA at Close which is 5223 today.
Having said this, it is important to note that the Markets are likely to remain in this 100-odd points range, while attempting to break above it. The 100-DMA at Close levels is the important levels (including its filter) to act as important support.
All and all, this technical factor as well as related factors such as announcement of IIP, and the external global cues are likely to keep Markets volatile and range bound. But equally important to note that there has been no structural breach on the Daily Charts. Therefore, while avoiding shorts, some stock specific purchases may be made. Overall, cautious approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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