MARKET TREND FOR TODAY
April 23, 2012
The Markets got a taste of Algorithmic
trading caused by punching errors once again as the Markets saw a vertical fall
in just few seconds of 80-odd points on Friday and then recovered half of it to
end the four-day gaining streak to end the day with modest losses. The Markets
opened on a flat to mildly moderate note on Friday and spent almost ¾th of its
session in a very capped and narrow range. Suddenly a freak trade in Infosys
and NIFTY caused a sudden and severe drop in NIFTY and NIFTY Futures and this
was aggravated by the triggering of fed stoplosses in the system as the Markets
went on to give day’s low of 5245.45. The Markets however recovered half of it
to finally end the day at 5290.85, posting a modest loss of 41.55 points or
0.78%. It has formed a similar top and lower low on the Daily High Low Charts
and has ended the Week with net gains of 83.40 points or 1.60.
The Daily and Weekly technicals of the
Markets point towards continuation of consolidation and range bound movements
with a positive bias. For today, the Markets are likely to open on a flat to
mildly negative note and look for directions with the intraday trajectory
continuing to remain important. The levels of 5340 and 5420 are immediate
resistance levels on the charts and the levels of 5245 and 5210 are immediate
supports.
All lead indicators continue to remain in
place. The RSI—Relative Strength Index on the Daily Charts is 50.7261 and it
shows no negative divergence or failure swings and is neutral. The Daily MACD
remains bullish as it continues to trade above its signal line. The Weekly RSI at
53.0221 too is neutral as it shows no negative divergence or failure swings and
the Weekly MACD too remains bullish as it trades above its signal line.
The NIFTY Futures Open Interest remains
almost unchanged and the stock futures continue to add Open Interest. We have
expiry week from today and the sessions are likely to remain dominated with
expiry centric activities.
Having said this, all technicals on both
Weekly and Daily Charts remain in place. They point towards no major reason for
breakdown and also, as mentioned in previous editions of Daily Market Trend
Guide, there is no breakout on the upside either and thus the Markets are all
set to remain in a range, and thus volatile. Any sustainable upside shall occur
above 5400-5420 levels and until then range bound movement is expected.
All and all, with the range bound movement
expected, it is advised to refrain from shorts and aggressive positions on
either side. Extremely selective stock specific approach is advised but
selective buying is advised as overall bias remains on the upside. Overall,
positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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