Daily Market Trend Guide -- Friday, November 25, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets yesterday saw a much awaited and long overdue technical pullback as it ended the day with modest gains. The Markets opened weak yesterday and after touching the low of 4639.10, rose over 130-odd points from they days low to end the day at 4756.15, posting a decent gain of 50 points or 1.06%. In the process, the Markets have formed a parallel bar with similar top and bottom on the Daily High Low Charts.

 

For today, expect a subdued opening in the Markets and today’s session would be critical for the Markets to decide the trend for coming weeks. Today, expect the Markets to open on a subdued note with the levels of 4780 and 4845 acting as resistance levels and the levels of 4720 and 4680 acting a crucial support levels. The RSI—Relative Strength Index on the Daily Charts is 32.8289 and it has crossed above its OVERSOLD formation which is Bullish. It does not show any negative divergence or failure swing. The Daily MACD continues to remain bearish as it trades below its signal line. On the Candles, A While Body occurred as the prices closed quite higher than they opened. 

Today’s trend would continue to critically depend on the behaviour of the Markets vis-à-vis the levels of 4780. The 4780 levels continue to remain a critical support before 4720 levels (which is currently likely to act as resistance until markets moves past the levels of 4780). It would be imperative for the Markets to move past this levels as soon as it can so that it can re-enter the broad trading range of 4720-5170 it traded in for almost two months. Until it moves past 4780 levels, it may accumulate with slight downward risk with the levels of 4720-4680 acting as supports.

All and all, the volumes have been good and there continues to be large rollovers of short positions yesterday and there are chances that we may see the Markets move past this level of 4780. For this, maintenance of levels of above 4720 would be critical. There are chances that after a subdued opening we may see the trend improving as the session progresses. However, a dip below 4720 will infuse some weakness in the Markets. While stock specific purchases may be seen, cautious approach is continued to be advised for the day.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com