MARKET TREND FOR TODAY February 28, 2012
The Markets went deeper into correction yesterday, quite on expected lines as it ended the day with fourth day of loss. The opened on a moderately lower note and transformed itself into falling channel and downward trajectory and remained so for the entire session. The Markets kept making new intraday lows as it went on to give the intraday low of 5268.15. It ended the day near the low point of the day at 5281.20, posting a deep cut of 148.10 points or 2.73%. With this, the Markets have lost 325.95 points in last four sessions and has formed a sharply lower top and lower bottom on the Daily High Low Charts.
We draw your attention to last couple of editions of Daily Market Trend Guide wherein we have been maintaining that given the unabated rise of the Markets in “overbought” zone, the correction too, would be similarly sharp, and that is what precisely it has been.
For today, we can expect the Markets to open on a moderately positive note and look for direction. After losing 325 odd points in last four session, we might see some nominal rise/pullback in the Markets today, but the support which it broke while coming down could act as resistance. For today, the levels of 5325 and 5390 can act as resistance and the levels of 5245 and 5205 may act as immediate supports.
All lead indicators continue to point towards continuing weakness baring a pullback of a day or so. The RSI—Relative Strength Index on the Daily Charts is 48.2630 and it has reached its lowest value in last 14-days, which is bearish. It, however, does not show any negative divergence. The Daily MACD continues to remain Bearish as it trades below its signal line.
All and all, we have seen a 33% retracement on Close levels and thus, we may see some sort of pullback. However, as evident from the Charts, the levels of 5400 would now act as immediate resistance for the Markets as it is the support it broke while coming down. So, today, we may see some pullback, there are all chances that volatility too may be seen and despite some intermittent pullbacks, correction in the Markets may continue. Overall, it is advised to remain highly stock specific in making purchases and at the same time, vigilantly protect profits at higher levels. Overall, cautious outlook is maintained for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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