Wednesday, April 18, 2012

Daily Market Trend Guide -- Wednesday, April 18, 2012

MARKET TREND FOR TODAY                                                           April 18, 2012
The Markets rejoiced a 50-bps cut in the REPO Rate, first time since three years as it ended the day with decent gains after greatly volatile session and with the NIFTY moving over 150-points intraday as the session remained greatly volatile. The Markets opened flat to moderately negative and traded in capped range until the RBI made announcements following which it saw a sharp increase of 60-odd points. It however slowly pared those gains again to trade flat. It saw recovery again and went on to give its intraday high of 5298.30 and ended the day at 5289.70, posting a decent gain of 63.50 points or 1.22%. In the process, it has formed a sharply higher top and higher bottom on the Daily High Low Charts.

Since the Markets have ended the day near the high point of the day, technically speaking, they are expected to open higher and continue with their up move. Today, we can fairly expect the Markets to open on a positive note and look directions. The intraday trajectory would continue to remain important.

For today, the levels of 5315, which is the pattern resistance as denoted by blue falling trend line and the levels of 5338 which is the 50-DMA for the Markets and the levels of 5400 shall act as immediate resistance on the Charts and the levels of 5250 and 5210 shall act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 51.0511 and is neutral as it shows no negative divergence or failure swings. The Daily MACD still continues to trade below its signal line.

All F&O data point towards  continuation of upward move. The NIFTY futures have added over 10 lakh shares and the Stock Futures have added over 6 Crore shares in Open Interest indicating creation of fresh long positions. 

All and all, the underlying trend remains intact. However, the way there had been no negative breach on the Charts couple of days back, similarly, there is no positive breakout as yet. Following this, the Markets faces multiple resistance until it moves past 5400-5420 levels and until this happens , all profits should be protected vigilantly. Stock specific purchases may be made as selective picking would continue but at the same time, vigilant profit booking should also not be ignores until the Markets moves past the mentioned levels. Overall, positive outlook is advised for today as underlying trend remains intact.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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