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The Markets staged a strong up move yesterday after a steady and quiet start and ended the day with robust gains and in the process have formed a sharply higher to and higher bottom on the Daily High Low Charts.
Today, would be a critical session of the Markets as it has closed yesterday near two of its important and major resistances.
Today, expect the Markets to open on a positive note following positive global cues and trade positive at least in the initial session. Thereafter, it would be very critical to see what trajectory it forms in the early session, coupled with the volumes.
Today, with the Markets expected to open positive, 5750 and 5770 shall act as resistance and the immediate supports are expected to come in at 5680 and 5610.
The RSI—Relative Strength Index on the Daily Chart is 67.3596 and it does not show any negative divergence. It has reached its highest value in 14-days and this is bullish. The Daily MACD continues to trade above its signal line.
At this juncture, we need to draw your attention to two important factors. There is a falling trend line drawn from the NIFTY’s lifetime highs of 6335, and joining the subsequent lower tops at 6181 and 5906, poses a resistance to the Markets around 5700 levels. The Markets have closed a notch above this but apart from the above pattern resistance, the 200 DMA of the Markets is at 5743, which again is a major resistance. Also, as per the F&OData, the FIIs have indulged into huge short covering yesterday.
All and all, the conclusion can be drawn that the Markets will have to move past and Close above its 200 DMA in order to move out of the falling channel and also the resistance of 200 DMA. It is advised to exercise caution until this levels are passed and not to get carried away with the up move that occurred yesterday. Continuation of stock specific approach with protection of profits and cautious outlook is advised for today.
The Markets spent a resilient session yesterday as it continued to consolidate rather than correct and endedflat with nominal losses. In this process, the Markets have continued to give a lower top and lower bottom on the Daily High Low Charts.
Today is going to be no different. The Markets are likely to open on a flat note and look for directions heavily depending upon the volumes and the intraday trajectory that it forms.
With the Markets likely to open on a flat note, the levels of 5670 and 5710 continues to remain resistance levels and the supports continue to existat 5580 and 5520 levels on the lower side.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 60.5435 and it shows no negative divergence or failure swings and is therefore neutral. The Daily MACD continues to trade above its signal line.
On the Candles, A long upper shadow occurred. Since this has occurred after the pullback near the high price levels, this can be regarded as a potentially bearish indication. Also A Spinning Top has occurred which signifies potential temporary weakness at current levels.
The Markets have shown resilience in last couple of session as it has seen some short covering from lower levels keeping is range bound and consolidation instead of correcting. However, in doing so, the volumes have been lower than average and the formation of lower top and bottom have continued so far. Also, given this technical reading on Candles, and the lead indicators neutral, we continue to advise caution until the Markets moves past the levels of 5710 again. Until this happens, as we have been advising this week, highly stock specific and selective approach should continued to be adopted while vigilantly protecting profits at higher levels. Overall, a range bound, slightly volatile day expected. Cautious outlook is advised for today.
MARKET TREND FOR TODAY The Markets yesterday though remained resilient, continued to show signs of consolidation as it moved in a very narrow intraday range though it recovered from its lows to end the day with modest losses. However, in this process, the Markets have formed a lower top and lower bottom on the Daily High Low Charts.
For today, the consolidation is expected to continue with the Markets opening on a flat note and looking for directions with the overall downward bias. With the Markets expected to open on a flat note, the levels of 5660 and 5700 shall continue to act as resistance and the supports are expected to come in only at 5580 and 5520 levels.
The RSI--Relative Strength Index on Daily Chart is 61.3073 and is neutral as it shows no negative divergence or failure swings. The Daily MACD still continues to trade above its signal line. On the Candles, the last three candles shows overall pattern as generally bearish.
As mentioned in our earlier editions, the fresh up move shall occur only above 5700 levels and until this happens it is advised to continue with extremely stock specific selective approach while vigilantly continuing to protect profit at higher levels as the Markets may see its 100 and 50 DMAs of 5553 and 5510 if it corrects. Thus, overall, highly stock specific and cautious outlook is advised for today.
Though the Markets ended the day with modest gains, it did so with some amount of resistance after coming off from its opening highs and trading in a narrow range later and in the process have formed a lower top but higher bottom on the Daily High Low Charts.
For today, expect the Markets to take a breather from the up move that it was showing and thus, expect the Markets to open on a flat note and look for directions.
With the Markets expected to open on a flat note, the levels of 5680 and 5705 shall continue to act as resistance and the levels of 5609 and 5560 shall act as supports.
The Markets have shown a pullback of over 9% in last couple of sessions, and especially its up move beyond its 50-DMA and 100-DMA has slightly become unhealthy as both of these averages have reported a negative crossovers.
The RSI—Relative Strength Index on the Daily Charts is 63.3611 and it does not show any failure swing. However, NIFTY has made its no 14-day high but the RSI has not and this is NEGATIVE DIVERGENCE.
The Daily MACD continues to trade above its signal line.
The Markets, as explained above, have given a lower top and also a negative divergence on the RSI and this is, the first signs of the Markets losing momentum in the short term.
If this happens, the most immediate supports would come in at the levels of 100 and 500 DMAs at Close levels which are 5549 and 5514 respectively. On the upside, further up move shall occur only after Markets moves past the 5705 levels.
All and all, the activities in the Markets are going to remain highly stock specific and thus, it is advised to remain ultra selective while making fresh purchases while continuing to vigilantly protect profits at higher levels. Intraday volatility cannot be ruled out.
While avoiding over leverage, high degree of caution is advised today with stock specific outlook.
The Markets on Friday, showed first signs of consolidation as it took a breather from the series of gaining sessions to end the day with moderate losses and in the process have still formed a higher top and a slightly higher bottom on the Daily High Low Charts.
Today’s session is likely to be somewhat similar to that of Friday’s session. On back of strong global cues, the Markets are expected to give a positive opening but are likely to consolidate / correct and this would largely depend upon the intraday trajectory that it shall form.
With the positive opening expected in the Markets today, the levels of 5670 and 5710 shall act as resistance and the levels of 5580 and 5530 are likely to act as immediate supports.
All lead indicators remain more or less in place. The RSI—Relative Strength Index on the Daily Chart is 61.8587 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade above its signal line.
On the Weekly Charts, the RSI is 51.1842 and that too is neutral as it shows no negative divergence or failure swings. The Weekly MACD however continues to remain bearish as it trades below its signal line.
Going by Chart Pattern Analysis, the levels of 5705 has a resistance by way of falling trend line on Weekly Charts that joins two previous tops. Furthermore, this levels is also the 50-DMA on the Weekly Charts. Further to this, on the Daily Charts, this level, i.e. 5705 has become an immediate top and further up move can be expected only after the Markets move past this levels.
All and all, the Markets are likely to consolidate / correct even after positive opening, largely depending upon the intraday trajectory that it forms. Further to this, it is strongly advised to maintain highly stock specific approach while vigilantly protecting profits at higher levels. High degree of caution is advised while taking fresh long positions. Overall, cautious approach is advised for today.