Monday, April 23, 2012

Daily Market Trend Guide -- Monday, April 23, 2012

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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