MARKET TREND FOR TODAY March 5, 2012
Markets had an truncated session on Saturday for one hour and forty five minutes to test its disaster management and recovery systems and the Markets expectedly traded in a range and remained sluggish to end the day flat. The Markets always remain very flat in such sessions on account of less trading time and even lesser participation. The Markets ended the day at 5359.40, posting a very negligible loss of 0.05 points or 0.001%. With this, the Markets have ended the week with net loss of 69.90 points or 1.24%.
This week and the next week, i.e. the next fortnight would be very important for the Markets to decide its trajectory for the immediate short to medium term. The next fortnight has nine sessions and very three important news flow to react to, i.e. the UP elections, the Credit Policy and offcourse, the Union Budget.
The exit polls do not suggest the clean victory for the Congress. The SP is expected to emerge a single largest party and the result would be a hung assembly. This is not a news flow that the Markets will react with a bang.
For today, expect the Markets to open on a flat to mildly negative note and look for directions. The lead indicators point towards no big runaway rally (except one created by news flows) and the pattern analysis point towards a negative bias. The RSI—Relative Strength Index on the Daily Chart is 52.9550 and it is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to remain Bearish as it trades below its signal line. On the Weekly Charts, the RSI remains neutral and the pattern analysis points towards no big rally.
Having said this, it is important to note that the technicals are likely to take a back seat given the three important events and the news flow. However, the outcome of the first one is likely to be a dampener, unless some fruitful partnerships are worked out. The two others are yet to come. Also important to note that the Markets may rally with the positive news flow and in the same manner, slightest of the negative point will have the technicals take over and they certainly have a negative bias.
All and all, very cautious approach is advised for the next fortnight, starting from today. Very selective purchases should be made and profits should be protected equally vigilantly. Aggressive positions should be avoided on either side. Overall, cautious approach is advised for today and few more days to come.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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