MARKET TREND FOR TODAY January 5, 2012
The Markets yesterday traded almost very near to what it was analysed in our yesterday’s edition of Daily Market Trend Guide as it consolidated just below 4800 mark and then suddenly pared its gains towards the end to end the day with moderate losses. The Markets opened positive but soon dipped into the red. The Markets saw a sharp recovery in the afternoon trade, but in the last hour and half of trade, it pared all of its gains, recovered a bit again to finally end the day at 4749.65, posting a net loss of 15.65 points or 0.33%.
Today, expect the Markets to open flat and continue to consolidate. The levels of 4800 would still continue to act as temporary resistance until the Markets moves past it. Until this happens, it is likely to remain in a broad range of 4800 on the upper side and 4650 on the lower side. This is a broad range which is indicated with the red and black support lines on the Chart above. For any sustainable up move to occur, the Markets will have to move past the levels of 4800 and sustain above that.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 48.4079 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.
NIFTY has shown a very negligible decrease of 0.47% in Open Interest which should not be a factor to worry about. Majority of NIFTY components have either shown increase in open interest with the price rise or some amount of increase in OI even with the decrease in price indicating some creation of short positions.
All and all, the Markets may continue to consolidate in the opening trade and may look for directions. Both intraday trajectory and volumes shall be critical to decide the trend but at the same time the undercurrent remains bullish and the bias remains towards upside. Selective purchases may be made and at the same time, profits at higher levels should be protected until the Markets moves past the levels of 4800. Overall, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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