MARKET TREND FOR TODAY
March 28, 2012
The Markets yesterday
traded almost precisely as expected yesterday as it traded with positive bias
but remained equally volatile but ended the day with gains. The Markets opened
on a positive note but initially failed to sustain its opening gains as it
pared all of its gains to trade flat. It continued to trade in a range in the first
half of the session, but it saw a sudden a sharp pullback once Government
issued clarification and willingness to exempt P-Notes from GAAR. The Markets
recovered very sharply to give its intraday high of 5277.95. However, it came
off from those levels too, but in the end, again inched up in the volatile
manner to finally end the day at 5243.15, posting a gain of 58.90 points or
1.14%. In the process, it has formed almost a Parallel Bar on the Daily High
Low Charts.
For today, the analysis for the Markets
would remain more or less the same as that of yesterday. We may continue to
see volatility in the Markets with them
trading with them with overall positive bias.
For today, expect the Market to open on a
flat to moderately negative note and look for directions. As yesterday, the
intraday trajectory that it forms shall continue to be important in deciding
the trend for the day. The levels of 5290 and 5340 shall act as immediate
resistance on Charts and the levels of 5180 and 5152 in the form of 200-DMA
shall act as major support for the Markets.
The RSI—Relative Strength Index on the
Daily Chart is 46.2496 and it continues to remain neutral as it shows no
negative divergence or any failure swing. The Daily MACD continues to trade
below its signal line.
Having said this, it is also important to
note that today is the penultimate day of expiry of current derivative series
and the session is also likely to remain dominated with rollover centric
activities. The F&O data continues to suggest short covering yesterday but
still, large amount of shorts still exists in the system. The support is likely
to come in from these shorts and also some fresh longs that are likely to be
created.
All and all, volatility in the Markets is
likely to continue. With no structural breach on the Charts, the Markets shall
remain in a broad range swinging either way and volatile. Fresh sustainable up
move is expected only above 5400-5420 range but until that occurs the Markets
are likely to exhibit very volatile behaviour but are likely to trade with
overall upward bias. Thus, like yesterday, short should be strictly avoided and
it is advised to remain highly stock specific and selective. The day should be
approached with positive caution.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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