MARKET TREND FOR TODAY April 9, 2012
The
Markets traded negative for the entire session on Wednesday as it opened
negative, traded in a capped range and ended the day with modest losses. The
Markets opened negative on expected lines and remained directionless throughout
the session with negative bias. It went on to give intraday low of 5305.30. It
however recovered a bit to finally end the day at 5322.90, posting a modest
loss of 35.60 points or 0.66%. It the
process, it has formed a lower top and lower bottom on the Daily High Low
charts. In the three-day short trading
week, the Markets have ended with net gains of 27.35 points or 0.52%.
Today, expect the Markets to open on a
modestly negative note and trade in a range. Today’s lower opening would be
more or less in adjustment to the Thursday’s decline in global markets as we
had a trading holiday. However, the pattern analysis on the Daily Charts
clearly suggest the Markets to trade in a range.
For today, the levels of 5365 and 5410
shall act as immediate resistance on the Charts and the levels of 5305 and 5265
shall act as immediate supports. The today’s opening is likely to see the
Markets opening below its 50-DMA levels
of 5330 and this is likely to act as resistance at Close.
All lead indicators continue to remain
firmly in place. The RSI—Relative Strength Index on the Daily Charts is 51.8172
and is neutral as it shows no negative divergence or failure swings. The Daily
MACD continues to remain bullish as it trades above its signal line following
positive crossover. On the Weekly Charts too, RSI is 54.3830 and it shows no
negative divergence or failure swings and is neutral. The Weekly MACD too
remains bullish as it trades above its signal line.
The F&O statistics have continued to
show similar trend of NIFTY Futures shedding the OI while stock futures adding
the OI significantly.
Having said this, it is very important to
note that for the Markets to trade with a strong upward bias, it will have to
close above its 50-DMA in order to avoid any weakness at Close. Secondly, it has seen a pattern
resistance in form of a falling trend line as shown in blue in the Charts, and
also another pattern resistance in the 5400-5420 range. So, for any sustainable
up move to occur, the Markets will have to move past these levels. Until this
happens, we will see range bound movement and this will remain volatile with
nominal downward bias and some consolidation.
All and all, with no trigger on the
downside but with multiple pattern resistance on the Charts, a range bound week
can be expected. Volatility shall remain. It is advised to refrain from any aggressive
positions on either side. While stock specific activity is advised, profits too
should be vigilantly protected. Overall, a cautious approach is advised for
today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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