Daily Market Trend Guide -- Monday, October 24, 2010 (Published in the Morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets saw a sluggish session on Friday as it failed to sustain its gains from the first half of the session as it pared its gains, dipped into the red and ended the day with moderate losses despite positive global Markets. In the process, the Markets have still formed a higher top and higher bottom on the Daily High Low charts.

Even with the negative close, there as been no structural breach on the Charts and thus, the Markets are again likely to take cue from positive global Markets and favorable technicals to move up again today. However, this remains a expiry week with one holiday so larger rollover activities may be seen and the session may likely remain dominated with rollover centric activity.

For today, expect the Markets to open on a gap up note and look for direction and the intraday trajectory would be critically important. The Markets are likely to open on a strong note and it would be important for the Markets to maintain that trajectory.

For today, the levels of 5120 and 5170 shall act as resistance and the levels of 5010 and 4980 shall act as support.

The RSI—Relative Strength Index on the Daily Chart is 51.4943 and is neutral and shows no negative divergence or failure swing. The RSI on Weekly Charts too is neutral without any failure swing or negative divergence.

The Daily MACD is bullish as it trades above its signal line. The Weekly MACD trades below its signal line but is likely to report positive crossover this week. On the Weekly Charts too, the Markets have been in Rectangle Trading range with the levels of 5170 being a resistance. Thus, the Markets continues to be in this trading range and as often mentioned, fresh sustainable up move shall occur only above 5170 levels and thus until then volatility will continue to remain. However, the bias certainly remains on the upside. All and all, it is strongly advised to avoid shorts and still continue to remain stock specific until the Markets are in range while protecting profits. Positive caution is advised for today.

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