MARKET TREND FOR TODAY March 6, 2012
The Markets remained bearish yesterday as the exit polls failed to provide any positive trigger and the technicals, which had a negative bias on the Charts weighed in and the Markets ended the day with losses . The Markets opened on the negative note and remained negative for the entire session as it went on to give the intraday low of 5265.70. The Markets never saw any significant recovery as it also ended the day near the low point of the day at 5265.70, posting a loss of 79.05 points or 1.47%. In the process, it has formed a sharply lower top and lower bottom on the Daily High Low charts.
For today, the Chart Pattern Analysis as well as the lead indicators continue to paint a weak picture and very clearly suggests the weakness to continue unless some external news flow poses a positive surprise.
For today, expect the Markets to open on a negative note and look for directions. The Levels of 5400-54220 zone has so far acted as immediate top for the Markets and after brief accumulation on the Charts it has given up yesterday and thus, purely speaking on technical terms, the weakness is likely to continue. The Markets has minor support on the 5280 levels, but the opening would be certainly lower than this and this support might not hold good any more. The major support now comes in at 5225 and 5166 which is the 200-DMA for the Markets.
The lead indicators point towards continuing weakness. The RSI—Relative Strength Index on the Daily Chart is 46.8791 and it has reached its lowest value in last 14-days which is Bearish. It does not show any negative divergence. The Daily MACD continues to remain Bearish as it trades below its signal line.
The UP Election counting shall start throwing up results today. Any positive deviation from what the Exit Polls showed on Saturday would cause the Markets to rally, but this is very less likely. If something completely different comes, what is shown otherwise in the exit polls, would favorably change the equation for better at the Centre and this can cause the Markets to rally, putting all technicals aside. However, as said earlier, it has remote possibilities.
All and all, caution towards creation any aggressive positions is advised. As we have been advising earlier, longs should be taken very selectively with very vigilant protection of profits. Purchases may be initiated only after the Markets nears its stable support levels. Until then, extremely cautious outlook is advised for the day.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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