Daily Market Trend Guide -- Wednesday, November 02, 2011 (Published in the Morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a session yesterday wherein it continued to correct as it ended the day with losses forming a lower top and lower bottom on the Daily High Low Charts.

Post gap up opening and closing on Friday, the Markets have resisted at its 200-DMA and since then have corrected in the following to sessions.

For today, following weak global markets and following weak news from Euro zone, we can expect the Markets to open on a negative note and look for directions. After weak opening today, the intraday trajectory that the Markets form shall be critically important to decide the trend for today as well as coming sessions.

For today, the levels of 5235 and 5205 are expected to act as supports and the levels of 5295 and 5345 are likely resistances on the up side.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 58.8999 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

At this point, we need to take into account few important things. With the Friday’s gap up gains of 458 points, the Markets had created a big gap on the Daily High Low Charts. While doing so, it had resisted on the upside near its 200-DMA and it had moved past its 100-DMA with a  gap at which it was expected to resist. In last two sessions, the Markets filled up it gap and this can be termed a technical reaction apart from global news flows that we are having. Yesterday also, it took support at its 100-DMA and today also, with the negative opening the levels of 100-DMA of 5235 shall continue to act as major support. Even in the event of Markets opening negative and momentarily dipping below the levels of 5235, another major patter support comes in at 5170, which the Markets broke after trading in range for over two months. All and all, even if the Markets opening lower, it is expected to trade near support and is strongly expected to recover as the session progresses depending heavily on the intraday trajectory that it forms post opening or during the day. It is strongly advised to avoid short positions as lot of shorts are seen in the Markets. Cautious but positive outlook is advised for today.

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