Daily Market Trend Guide -- Friday, December 02, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR THE DAY                           

The session yesterday turned out to be precisely in the way it was analysed by us. We had categorically stated that the Markets will see a gap up opening but at the same time, they are likely to resist at its 50-DMA and therefore intraday trajectory would be very crucial and critically important.

Perfectly keeping in line with the above analysis, the Markets did see a gap up opening in the Morning but gave its intraday high of 5011.90 as against the 50-DMA of 5022 in the early minutes of the trade and thereafter remained in a sideward / falling trajectory for the rest of the session. The Markets pared its early morning gains a bit to end the day at 4936.85, posting a net gain of 104.80 points and still forming a sharply higher top and higher bottom on the Daily High Low Charts as evident from the below given chart.

Today, the Markets are expected to see a flat opening and shall look for directions and it shall be important for the Markets to remain in positive trajectory to avoid weakness.

The Indian Markets are too likely to see some consolidation with the levels of 5020 acting as immediate resistance and the levels of 4880 and 4835 acting as supports. All lead indicators continue to remain in place with RSI—Relative Strength Index at 48.4468 and is neutral as it shows no negative divergence or failure swings. The Daily MACD, though it is improving, is still below its signal line. On the Candles, A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.

Another important thing to note that the Open Interest figures in NIFTY Futures has remained unchanged. This signifies that there has been no significant short covering in the Markets. Further to note is the fact that the Indian Markets remained underperformer as compared to its peers. Both of this factor leave gap for a continuation of up move. However, as mentioned above, the intraday trajectory would be crucial and critically important.

The resistance near the 50-DMA has been a technical factor and this level shall continue to act as temporary resistance and the Markets are likely to see some consolidation around these levels. Also, therefore, further sustainable up move shall occur only above this, but the Markets are likely to remain in a range, bit volatile and consolidate with a upward bias. Shorts should be avoided. Overall, cautious but positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com