MARKET TREND FOR TODAY
April 27, 2012
The April Series ended on a very muted note
as the Markets spent the entire session in a extremely narrow band of 20-odd
points and ended the day with moderate losses. The Markets opened on a mildly
positive note and gave its intraday high of 5215.60 in the very early session of the trade. It slipped
into the red after briefly trading positive and thereafter spent most of the
session in a very narrow range. It slipped a bit towards the end to form day’s
low of 5179.05 but finally ended the day at 5189, posting a moderate loss of 13
points or 0.25%. In the process, it has formed a lower top but higher bottom on
the Daily High Low Charts.
Today, expect the Markets to open on a flat
to moderately positive note and look for directions. Given flat opening
expected, the intraday trajectory would be critically important as the Markets
hovers around two most critical support levels.
For today, the levels of 5254 and 5280
are immediate resistance levels on the
Charts, and the levels of 5128 and 5130 are important support levels in the
form of 100DMA and 200DMA respective at Close levels.
The RSI—Relative Strength Index on the
Daily Chart is 43.6062 and it has reached its lowest value in last 14-days
which is bearish. However, it shows no negative divergence. The MACD on the
Daily Charts to continues to trade below its signal line. On the Weekly Charts
too, the RSI, at 49.3832 is bearish as it has give its 14-week low, but shows
no negative divergence. The Weekly MACD remains bullish as it trades above its
signal line.
Given this, it is very important to note
that the overall Open Positions at the beginning of this series is one of its
all time lows as it has started very light and low. Within these very less
overall open positions here are majority of shorts which have been rolled over
as the NIFTY has added over 33 lakh shares in Open Interest.
Further to this, if we go with Pattern
Analysis along with the above statistical reading, the lower DMA is in the
process of giving a positive crossover but cutting the larger DMA from below,
as evident from the Charts. Further to this, two important supports in the form of 100 DMA and 200 DMA exists in
very near range. Given all this ,the Markets shows a very limited down side.
All and all, range bound trade and the
consolidation will continue. We may continue to see a range bound and as a
result volatile trade but given the very low base of open positions, sharp
movement on the either side cannot ruled out but the bias remains positive due
to reasons enumerated above. IT is strongly advised to refrain from aggressive positions
until the Markets gets directional momentum and also to avoid shorts. Any
weakness may be utilized to make selective purchases. On the other hand,
profits should continued to be protected. Overall, cautiously positive outlook
is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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