MARKET TREND FOR TODAY January 17, 2012
The Markets continued to consolidate yesterday as it opened on a lower note but went on to recover and end the day with modest gains. The Markets opened on a lower note on expected lines and gave its intraday low of 4827.05 in the morning trade. Thereafter, it transformed itself into rising trajectory and not only recovered from its morning lows but went into the positive territory to give intraday high of 4880.80. After trading in capped range there, it ended the day at 4873.90 posting a modest gain of 7.90 points or 0.16%. In the process, the Markets formed a slightly lower top and lower bottom on the Daily High Low Charts.
For today, the analysis remains the same as the one carried out yesterday. The Markets continue to remain under consolidation with positive bias.
For today, expect the Markets to open on a flat note. Thus, the Markets expected to open flat, the consolidation is likely to continue which may keep the Markets in a capped range. Due to this, the intraday trajectory and the volumes will continue to play critical role in determining the trend for the day. For today, the levels of 4900 and 4940 shall continue to act as resistance the levels of 4843 and 4800 shall act as immediate supports.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 57.5717 and it shows no negative divergence. The RSI has reached its highest value in last 14-days which is Bullish. The Daily MACD remains bullish as it continues to trade above its signal line.
In addition to this, the NIFTY Futures have added over 3 lakh shares in Open Interest and NIFTY PCR remains at 1.26.
From the above reading, it can be fairly concluded that the even though the Markets continues to consolidate at close levels, the undercurrent remains bullish. The Markets may remain volatile or trade in a range but the bias remains on the upside and are likely to test its 100-DMA levels on the upside. The levels of 4800 would have to be maintained in order to avoid any kind of serious weakness in the Markets which seems very much likely as the level continues to act as immediate support.
All and all, since the undercurrent remains buoyant, it is advised to refrain from short positions even if the Markets sees range bound trading, or even if it sees some profit taking bouts. At the same time, selective purchases may be continued to be made while vigilantly protecting profits at higher levels. Overall, cautious optimism is advised for the day.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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