Friday, April 20, 2012

Daily Market Trend Guide -- Friday, April 20, 2012

MARKET TREND FOR TODAY                                                      April 20, 2012
Positive consolidation continued in the Markets yesterday as the Markets ended 4th day in a row with gains as it ended the day with moderate gains. The Markets opened mildly positive and after trading in a range, it dipped into the red to give intraday low of 5291.30. However, it recover from its lows to trade into the green as it formed a rising trajectory for itself. It again pared some of its gains but later recovered again to give the day’s high of 5342.35. It finally ended a range  bound day at 5332.40 with posting moderate gains of 32.40 points or 0.61%. With this, it has form a Parallel Bar with the almost similar top and bottom on the Daily High Low Charts.

Today, again, expect the consolidation to continue in the Markets with the Markets expected to open on a lower note and then trade with possibilities to recover given the technicals, the Pattern Analysis and the F&O data. All point towards a consolidation, narrow and range bound movement with an upward bias today.

For today, the levels of 5368 and 5420 shall act as resistance and the levels of 5305 and 5260 are immediate supports on the Charts.

The RSI—Relative Strength Index on the Daily Chart is 54.1464 and it continues to remain neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it trades above its signal line.

The levels of 50-DMA, which is 5337 today, has continue to act as resistance at Close. It would be imperative for the Markets to move past this levels after which it can encounter resistance around 5400-5420 levels. However, again, NIFTY Futures have added over 10 lakh shares in Open Interest and Stock Futures have added over 6 Crore shares in the Open Interest indicating slow, but steady build up of long positions. Also, the Pattern Analysis point towards immediate short term strength on the Charts with the smaller  DMA rising to cut the larger DMA from below, indicating to give a positive crossover in next few sessions to  come.

All and all, no indications as yet for a breakdown on Charts and no upward breakout as yet too..!! So, stock specific action to continue and any dip should be used to make very selective purchases and at the same time, profits should be vigilantly protected as it is being done this entire week. Overall, range bound movement with positive bias is expected for today. Cautiously positive outlook advised.

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


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