MARKET TREND FOR TODAY January 13, 2012
The Markets yesterday continued to consolidate and correct a bit after it resisted at its 50-DMA levels as it ended the day with moderate losses. The Markets opened on a negative note and after briefly trading into the negative, it rose to give its intraday high of 4869.20, against the resistance levels of 4867 mentioned by us. The Markets saw paring of over 50 points from those levels in the early afternoon trade, but recovered in the rest of the session to end the day at 4831.25, posting a moderate loss of 29.70 points or 0.61%. In the process, it has formed a mildly lower top and lower bottom on the Daily High Low Charts.
For today, expect the Markets to again open on a flat to mildly negative note and look for directions. The consolidation is likely to continue in the Markets again with the 50-DMA continuing to act as immediate resistance. For today, in order to avoid weakness and maintain the levels above of 4800 in case of any weakness, the intraday trajectory would be important and volumes too are likely to play a important role.
For today, the levels of 4859, which is the 50-DMA and 4910 shall be resistance levels today. The levels of 4800, which the markets breached on the upside would act as immediate support.
All lead indicators continue to remain in place. The RSI—Relative Strength Index of the Markets on Daily Charts is 54.3219 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.
Overall, the analysis for today would remain similar to what was carried out yesterday. The levels of 50-DMA in the Markets would continue to pose immediate resistance and now, fresh up move can occur only above 4860 levels. Until this happens, the Markets would again consolidate between a short range of 4800-4860. The 4800 levels would continue to act as support, like it did yesterday. Any breach below 4800 could bring in some weakness in the short term.
Having said this, we continue to reiterate our stand of maintaining caution and remain very stock specific while making purchases. It is also advised to keep protecting profits at higher levels. Shorts too should be avoided as the Markets are just consolidating as of now. Overall, continuation of cautious approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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