MARKET TREND FOR TODAY January 11, 2012
After consolidation of over a week and after near-flat closing for four sessions in a row, the Markets yesterday gave a upward breakout on expected lines as it moved past the levels of 4800 to end the day with robust gains. The Markets opened stronger than expected and resisted around 4800 levels for about an hour or so. It finally breached those levels on the upper side and went on to give the day’s high of 4855.90 and finally ended the day near the high point of the day at 4849.55, posting a robust gain of 106.75 points or 2.25%. 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 mildly positive note and continue with its up move at least in the initial session. For today, the levels of 4876 and 4890 shall act as resistance an the levels of 4800-4785 shall act as supports.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 56.3113 and it shows no negative divergence. It has reached its highest value in last 14-days which is bullish. The Daily MACD continues to remain bullish as it trades above its signal line.
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.
Having said this, the levels of 4876 is the 50-DMA of the Markets and in the event of up move, the Markets are likely to resist there. On the other hand, since the Markets have moved past the level of 4785-4800, these levels shall now act as immediate support. If the Markets moves past its 50-DMA, it shall see further levels of up to 4950 but if not, then it shall consolidate again between the levels of 4790-4875 levels until it breaches those levels again.
All and all, the under current certainly remains buoyant. However, since the Markets have multiple resistances at different levels within very short span, it is still advised to keep making selective stock specific purchases and still keep protecting profits at higher levels. Positive outlook advised as overall trend continues to remain buoyant and intact.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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