Daily Market Trend Guide -- October 31, 2011 (Published in the Morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets saw a gap up opening on Friday on back of positive technicals as well as positive news flow from the Euro zone and in the process ended the day with robust gains and also formed a sharply higher top and higher bottom on the Daily High Low Charts.

The Markets opened some 150-odd points up and traded in the 20-point range for the entire session and sustained those opening gains in the end.

Today, we can expect a day of consolidation in the Markets. On Friday, the Markets saw resistance coming in at its 200-DMA. For today, expect the Markets to open on a flat note and look for directions.

The RSI—Relative Strength Index on the Daily Charts is 66.0531 and it has reached its highest value in last 14-days which is bullish. It does not show any negative divergence. The Weekly MACD continues to remain bullish as it trades above its signal line. On the Weekly Charts too, the RSI, at 53.1666 has made a new high in last 14-days which is bullish. Further Weekly RSI has set a new 14-day high whereas NIFTY has not, and this is Bullish Divergence on Weekly Charts. The weekly MACD has signalled a fresh bullish sign as it now trades above its signal line.

Having said this, the consolidation is still on the Cards. The NIFTY has 200-DMA at 5408 at this is likely to act as temporary resistance and the Markets will have to move past this levels for fresh continuation of up move. Further, on the Weekly Charts, the levels of 5421 is the Weekly 100-DMA of the Markets. So, it is greatly expected that the Markets will no consolidate in the 50-odd points levels before breaking out further.

All and all, the lead indicators remain perfectly in place which keeps the under current buoyant. However, there is likelihood of consolidation at current levels as mentioned. Stock specific approach is advised. Though intraday trajectory would be critically important for today’s trend, some minor sideward movement or some volatility due to mild profit taking cannot be ruled out. But again, as mentioned, under current remains buoyant. Positive outlook is advised for today.

Milan Vaishnav,

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