MARKET TREND FOR TODAY February 29, 2012
The Markets yesterday saw a sharp pullback, though it traded volatile and capped near the 5400 levels. The Markets opened positive, remaining in rising trajectory in the morning traded, moved sideward and range bound in the rest of the session as it gave its intraday high of 5391.10. The Markets finally ended the day at 5375.50, posting a decent gain of 94.30 points or 1.79%. In the process, it has formed a lower top and higher bottom on the Daily High Low charts.
Today it would be critical session for the Markets as it opening vis-à-vis certain levels and its intraday trajectory would decide the trend for today as well as for coming sessions.
The Markets are expected to open positive and likely to trade positive at least in the initial trade. The levels of 5400,(the blue line that is seen on the Charts) is the support that it broke while coming down is likely to act as resistance and the further resistance would come in at 5425 levels. Thus, the behaviour of the Markets as against the levels of 5400-5425 would be very critically important to decide the trend for the Markets in the coming days. Therefore, the opening of the markets as against these levels and its intraday trajectory would be critically important today.
The RSI—Relative Strength Index on the Daily Charts is 54.3939 and is neutral as it shows no negative divergence. The Daly MACD is bearish as it trades below its signal line.
Having said this, as mentioned above, the behaviour of the Markets as against the mentioned levels of 5400-5425 would be critically important to decide the trend for today and for coming days. Further to this, Markets are also likely to react to the ECB liquidity developments and also to the Quarterly GDP numbers to be announced. So, it is important to note that apart from the technicals, there are more external news flows that the Market is expected to react to.
So, in divergent circumstances, it is advised to remain light on positions until the clear directional track is achieved. No aggressive positions should be taken on either side. The purchases should be very selective and profits too should be protected at higher levels. Stock specific activities may continue to be seen. Since much would depend upon the intraday trajectory that the Markets forms post expected positive opening, volatility cannot be ruled out. We continue to advice to maintain a cautious outlook for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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