Daily Market Trend Guide -- Thursday, December 01, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY 

The Markets had a volatile session yesterday, and after moving on either side in a volatile manner, finally ended the day with moderate gains and in the process formed a lower top and lower bottom on the Daily High Low Charts. But still the Markets managed to end the day near the high point of the day on improved volumes which is a positive sign for the Markets.

We have been mentioning in past issues of Daily Market Trend Guide that after the 150-point spurt that we saw couple of days back, the Markets were likely to consolidate and at the same time, it was also important for the Markets to maintain support levels of 4780-4820. The Markets precisely did the same thing as it maintained a Close above these levels and also consolidated mildly with very less volumes. The Markets did not breached any significant supports either.

 As evident from the above Chart, though the Markets rested precariously near the multiple supports, the OVERSOLD lead indicators prevented it from breaking down.

For today, expect a huge gap up opening following collective Central Banks action in Europe which as sparked off a huge rally in the global Markets. This will ensure a gap up opening in the Indian Markets. The Markets are expected to open very strong but are likely to find resistance near the 50-DMA levels of 5022.

The RSI—Relative Strength Index on the Daily Chart is 41.5530 and is neutral as it shows not negative divergence or failure swings. The Daily MACD too continues to trade below its signal line.

Having said this, the Markets are expected to open strong and as mentioned earlier, it would be very necessary for the Markets to maintain positive trajectory in order to capitalize on today’s strong opening. Secondly, this should not be construed as resolution of European crisis and there are strong chances that some profit booking may be seen today, OR the Markets may consolidate again at higher levels.

All and all, this spurt should be used in selective stock picking and the profits at these higher levels should be very vigilantly protected. Even if the upside sustains, we may see consolidation again at these levels. 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
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