Daily Market Trend Guide -- Tuesday, November 08, 2011 (Published in the Morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets expectedly came off its morning highs on Friday as the Markets chose to remain safe ahead a extended weekend as it ended the day with nominal gains and in the process still continued to form a higher top and higher bottom on the Daily High Low Charts.

We had categorically mentioned in our Friday’s edition that the intraday trajectory would be critically important if the Markets wants to sustain and capitalize on its strong opening and expectedly Markets came off its highs forming a negative falling trajectory in the second half of the session.

This analysis will hold good for today also. The Markets are likely to open on a stronger note following positive global cues and gains in the US Markets but today also, the intraday trajectory would be critically important in order to capitalize on stronger opening. The levels of 5325 and 5352 shall act as resistance whereas the levels of 5250 and 5235 shall continue to act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Charts is 60.2743 and it continues to remain neutral without showing any failure swings or negative divergence. The Daily MACD continues to remain bullish as it trades above its signal line.

On the Weekly Charts, the RSI is  51.0531 and is neutral without showing any negative divergence or failure swings. The Weekly MACD is bullish since one week as it now trades above its signal line.

Having said this, the Markets shall continue to see a pattern resistance at 5420 levels on Weekly Charts and at 5325 and 5350 in form of a falling trend line drawn from the life time high levels of 6338. Also, a local important factor that we have a short and truncated week comprising of just three working days. All this factors are likely to keep the Markets in consolidating zone. This is likely to keep volatility and range bound movement in the Markets, even though the overall trend remains intact. In such circumstances, it would be important to vigilantly keep protecting profits at higher levels, while avoiding shorts. Overall, positively cautious outlook is advised for today.

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