MARKET TREND FOR TODAY
The Markets had a very weak last hour and half of trade yesterday where it saw sudden paring after spending the entire session in a very range bound trade as it went on to end the fourth session in a raw with losses and thereby forming a lower top and lower bottom on the Daily High Low Charts.
Today’s session would be very critical would see the Markets trying to avoid entering into a short term bearish phase.
For today, expect the Markets to open on a flat to mildly negative note and look for directions. The intraday trajectory would be all the more important today and the intraday trajectory that the Markets form today will decide if the Markets are to see further weakness in coming sessions or not.
For today, with flat to mildly negative opening expected, the levels of 5040 and 4980 are expected to act as supports and the levels of 5135 and 5170 shall act as immediate resistances.
The RSI—Relative Strength Index on the Daily Chart is 44.13 and it has reached its lowest value in last 14-days which is bearish. However, this time, it does not show any negative / bearish divergence. The Daily MACD continues to trade below its signal line and is bearish in the short term, showing very nominal signs of improvement.
Now, the most critical part of the story. The 50-DMA of the Markets today at Close is 5068.62 and it is very critically important to see that the Markets trades above this levels and sustains above this levels. In case of weaker opening, it would be very essential for the Markets to move past this level and sustain above this in order to avoid getting further weak. The Close will have to be above this level would be necessary for the Markets if it has to avoid entering into immediate short term bear trend.
Given this reading, it is advised to avoid fresh purchases until the directional orientation gets clear and at the same time, it is also advised to avoid short positions in the Markets as there may be chances of stability returning given the global cues. A cautious approach with tinge of optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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