Wednesday, March 14, 2012

Daily Market Trend Guide -- Wednesday, March 14, 2012

MARKET TREND FOR TODAY                                                      March 14, 2012
The Markets saw session with gains yesterday as the Markets opened above its resistance levels after a  gap up opening, remained there for the entire session and ended the day with decent gains. The Markets opened strong on positive cues but spent the entire session a 20-odd point range as it gave its intraday high of 5438.65. The Markets never really showed any intraday movement and ended the day at 5429.50, posting a decent gain of 69.95 points or 1.31%. In the process, it has formed a higher top and higher bottom on the Daily High Low Charts.

For today, expect a gap up and strong opening in the Markets again. The Markets are expected to open strong and trade positive at least in the initial trade. The intraday trajectory would be important to see if the Markets sustains its opening gains as during the last two sessions, there have been no intraday movement on the charts. 

For today, the levels of 5460 and 5510 shall act as resistance and the levels of 5420 and 5365 are the supports on the Charts.

The RSI—Relative Strength Index on the Daily Chart is 58.2371 and it shows no negative divergence or failure swing and is therefore neutral. The Daily MACD continues to remain bearish as it still trades below its signal line.

Having said this, it is important to note that on Monday, the Markets pared all of its opening gains immediately post opening and then traded in a extremely narrow range for the entire session. On the opposite, yesterday the Markets opened up and spent the entire session with virtually no intraday movement at all. This has obviously resulted into very moderate volumes. This also further signifies that the Markets did saw buying before the budget but the retain participation has remained at minimum levels.

Today, Railway Budget would be announced but that is expected to remain a non-event.

Overall, since the Markets have managed to end the day above 5400 and is likely to open above 5420 levels, which have been its resistance zone, the overall bias remains bullish, at least on the Charts. However, the Markets shall react in very volatile manner to the Monetary Policy tomorrow and the Budget on Friday.
All and all, though the bias remains on the upside, heavy volatility shall remain in coming two sessions. Also, until today, there has been virtually no intraday movement except the opening gain or loss and this has certainly kept the retail participation and thereby volumes away from the Markets. It is advised to make selective purchases and keep protecting profits at higher levels. However, aggressive positions may still be awaited. Positive caution is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331

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