MARKET TREND FOR TODAY April
30, 2012
The Markets had a quiet and positively biased short session
on Saturday as it ended the day with modest gains. The Markets opened positive
and traded positive in a capped range for the most part of the short trading
session. However, towards the end, it moved up further to give the day’s high
of 5216.40 and finally ended the day at 5209, posting a modest gain of 18.40 points
or 0.35%. With this it has formed a similar top and higher bottom on the Daily
High Low Charts. The Markets have ended the week with net loss of 81.85 points
or 1.54%.
For today, expect the Markets to open on a mildly positive
note and continue with its attempt of up move. The Markets may open and trade
positive at least in the initial session however the intraday trajectory that
it forms during the day would continue to be important as the Markets still
continues to remain in overall range.
For today, the levels of 5245 and 5290 shall act as
resistance and the levels of 5130 and 5125 shall be very important supports at
Close levels.
The lead indicators throw a contradictory signals on Daily
and Weekly Charts. The RSI—Relative Strength Index on the Daily Chart is
45.6526 and is neutral as it shows no negative divergence or failure swings.
The Daily MACD continues to remain bearish as it trades below its signal line.
On the Weekly Charts the RSI is 50.0578 and it has reached its lowest value in
last 14-weeks which is bearish. Also,
the RSI has give its 14-period low but NIFTY has not and this is Bearish
Divergence.
Coming back to the Daily Charts, the lower DMA (100) has
reported a Positive Crossover as it has
cut a larger DMA (200) from below and this indicators upward momentum in
the short term.
Given this contradictory reading on Daily and Weekly Charts
and the Pattern Analysis on the Daily Charts, the Markets are expected to see sharp
movement on either side this week. However, given the very low F&O Open
Positions and Markets trading above its 100-200 DMA, the downside still appears
limited until Markets breaches these
levels on the downside.
All and all, the volatility and the capped trade in the
Markets cannot be ruled out. As we had mentioned in one of our previous
editions of the Daily Market Trend Guide, the Markets have not given directional
signals on either side and this will keep it in a broad range and volatile
without going in any direction with conviction. It is advised to refrain from
shorts and avoid aggressive positions. Also it is strongly recommended to keep
protecting profits very vigilantly at higher levels. Overall, cautious outlook
is advised for the day.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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