MARKET TREND FOR TODAY January 18, 2012
The Markets had a very buoyant session yesterday, perhaps more than expected as it opened on a stronger-than-expected note, remained so for the entire session and ended the day with robust gains. The Markets opened on a positive note and kept making intraday highs for the entire session remaining in positive rising trajectory. The Markets moved past its 50 and 100-DMA during the day as it made its day’s high of 4975.55. It end the day near the high point of the day at 4967.30, posting a robust gain of 93.40 points or 1.92%. The Markets formed a higher top and higher bottom on the Daily High Low charts and saw volumes Rs. 1.40 lakh crores, above its average.
For today, technically speaking buoyancy in the Markets is expected to continue, but at the same time, consolidation cannot be ruled out. Expect the Markets to open on a flat note and look for directions. The intraday trajectory would be very crucial and the resistances that the Markets moved past yesterday would act as supports.
For today, the levels of 4930 and 4880 are likely to act as supports and the levels of 4995 and 5040 are expected to act as resistance on the upside.
All lead indicators continue to point towards buoyancy. The RSI—Relative Strength on the Daily Chart is 63.9876 and it has reached its highest value in last 14-days which is bullish. It does not show any negative divergence. 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 4 rising windows in the last 50 candles--this makes the current rising window even more bullish.
The NIFTY Futures have shown net addition in Open Interest and so have key stocks. So, apparently, we can certain believe the trend to have strong undercurrent, but at the same time, it would be prudent if we expected some consolidation to, looking at the “Overbought” nature of some NIFTY components. All and all, selective stock purchases may be made and profits should still be protected at higher levels. Even if the Markets sees some consolidation, or some profit taking bouts or movement in the capped range, it would be healthy for the Markets in the long run as it would make this up move even more healthy and sustainable. Positive approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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