MARKET TREND FOR TODAY January 4, 2012
The Markets saw a very stable and sustained up move yesterday as it opened expectedly positive and maintained its trajectory through out the session to end the day with robust gains. The Markets opened positive, went on to give intraday high of 4773.10, and ended the day near the high point of the day at 4765.30, posting a robust gain of 128.55 points or 2.77%. This was reflected across all sectoral indices too and in the process, the Markets have formed a sharply higher top and higher bottom on the Daily High Low Charts.
For today, expect the Markets to open on a positive note and continue with its up move at least in the initial trade. Technically, it is expected to continue with the up move as it has closed near the high point of the day. As always, due to little lower volumes, the intraday trajectory would continue to play crucial role in helping the trend to sustain.
As evident in the above chart, the level of 4795-4810 is the level which it broke earlier (the black support line drawn) is likely to act as resistance. Thus, for today, the levels of 4795 and 4835 are likely to act as resistance today.
All lead indicators continue to throw positive and bullish signals today. The RSI—Relative Strength Index on the Daily Chart is 49.3993 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has set a new 14-day high, whereas, NIFTY has not yet, and this is Bullish Divergence. The Daily MACD continues to trade above its signal line and is therefore bullish. On the Candles, A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 3 rising windows in the last 50 candles--this makes the current rising window even more bullish.
All and all, the under current remaining bullish. The Markets faces resistance around 4800 levels as mentioned above and are likely to consolidate around that level or may see minor profit taking even with the under current remaining buoyant. The Markets will have to move past the 4800 levels for further up move and there are chances that consolidation is seen. Overall, while protecting profits at higher levels, positive outlook may be maintained as bias still remains towards upside.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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