MARKET TREND FOR TODAY March 15, 2012
The Markets consolidated its gains yesterday as it prepared for two volatile sessions, today reacting to credit policy and tomorrow to the union budget. The Markets opened stronger and gave its intraday high of 5499.40 in the very early minutes of the trade. It however, remained in downward trajectory as it pared most of its gains in the first half of the session. The Markets, however, recovered a bit and still managed to end the day at 5463.90, posting a decently moderate gain of 34.40 points or 0.63%. It has continued to form a higher top and higher bottom on the Daily High Low charts.
Today, it is going to be a extremely important session for the Markets. The technical indicators point towards continuing upward bias and the Markets have two events, the Credit Policy and the Union Budget on two successive days to react to. The intraday trajectory would be important and the volatility is bound to stay.
For today, expect the Markets to open on a flat to mildly negative note. The Markets are expected to remain in a capped range until the Credit Policy is announced and shall react to it afterwards. For today, the levels of 5500 and 5535 are immediate resistance on the Charts and the levels of 5425 and 5400 are immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 60.3029 and it has reached its highest value in last 14-days which is bullish. The Daily MACD trades below its signal line but it is on verge of a positive crossover.
Having said this, it is important to note the following. The further indications on the Charts too are pointing towards continuance of uptrend. The 50-DMA has cut the 200-DMA from the above which is a positive crossover and a clear indication of short term bullish trend. Therefore, so long as the Markets stays above the levels of 5400-5425 support zone, there are no reasons for any weakness, unless there is specifically negative in the Budget.
Further, most of the Markets have discounted the fact that RBI may not cut rates today. So, the chances of negative on this front are less as this is widely discounted in the Markets, but slightest positive or a minor rate cut will give further impetus to the Markets.
The only non-technical factor that can slightly dampen the spirit is the resignation of the Railway Minister today. This, individually many not that great a affecting factor, but it is indication of how the UPA government is virtually bullied by its non-performing allies who are posing the real threat and are the actually the reason behind the policy paralysis that the UPA Government is suffering from. They are expected to pose serious roadblocks even if the Government tries to take “economically correct” measures in the coming Budget.
All and all, over all bias remains on the upside. It is advised to make purchases selectively and strictly refrain from fresh shorts and also protect profits at higher levels. Overall, positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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