MARKET TREND FOR TODAY
April 17, 2012
The Markets had a positive consolidation yesterday
ahead of Monetary Policy today as it consolidated on lower volumes in a range
bound session and closed with moderate gains. The Markets opened on a mildly
lower note yesterday but gave its intraday low of 5183.50 in the early minutes
of the trade. It recovered in the morning trade to trade flat and in a capped
range. It gained few more points but suddenly pared all of those gains to trade
negative in the afternoon trade. However, the final leg of the session saw sharp recovery again.
It recovered all of its losses, went back into the green, gave its intraday
high of 5233.50 and finally ended the day at 5226.20, posting a modest gain of
18.75 points or 0.36%. It the process, it has formed a lower top and almost
similar bottom on the Daily High Low Charts.
Today’s analysis would be more or less
similar that of yesterday as the Markets are likely to open on a lower note and
look for directions. Today’s trend would be heavily affected by the RBI’s
Monetary Policy announcements and this will certainly keep the Markets
volatile.
For today, the levels of 5265 and 5295 are
immediate resistance and the levels of 5180 and 5144 in the form of 200-DMA are
the major supports on the Charts.
The RSI—Relative Strength Index on the
Daily Chart is 46.3234 and it continues to remain neutral as it shows no
negative divergence or failure swings. The Daily MACD continues to trade below
its signal line.
Having said this, there has been large
amount of media hype surrounded around RBI’s Monetary policy and the hope for CRR
rate cut have diminished following Macro Economic Report of the RBI. However,
there are still wide expectations for a 25 bps Repo Rate Cut.
It is important to note that a token rate
hike / rate cut does no good or bad to a economy which has some more serious
ailments. Besides the media hype around
rate cuts, FIIs and Foreign Investors look more at a “trending” Macro
Economic Factors have always taken a decision based on more serious factors and
that too over a long term.
NIFTY Futures have added nominal Open
Interest and so do have Stock futures. If this is read with the above, it also
becomes important to note that the Markets continues to consolidate without any
negative breach on the Charts. The volatility that we are going to see today
would be a day specific issue and there will not be a negative breach on the
Charts until the Markets moves and closes below its 200-DMA and its filter.
All and all, volatile session ahead. It is
advised to refrain from any aggressive positions and the profits should be
vigilantly protected. Shorts should be avoided until the Markets breaches
200-DMA levels. Stock specific actions would be seen and any downside should be
used for making selective purchases. Positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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