MARKET TREND FOR TODAY
May 16, 2012
The Markets snapped its 5-day losing streak as it opened
moderately low, improved as the session went ahead and finally ended the day
with modest gains, quite on expected lines. The Markets opened on a moderately
negative note and traded in a capped
range in the morning trade. It however, came into the positive territory and
while remaining in upward rising trajectory, went on to give the day’s high of
4955.20 in the afternoon session. The Markets came off a bit from those levels
but recovered again to finally end the day near the high point of the day at
4942.80, posting a net gain of 35 points or 0.71%. The volumes remained on the
lower side and the Markets have formed a almost parallel bar with slightly
lower top and bottom on the Daily High Low Charts.
Technically speaking, since the Markets have ended the day
near the high point of the day, they should, under normal circumstances,
continue with their up move. However, this shall not happen following global
cues and we are again likely to see a weaker opening. However, we are not
expected to see lows below the opening levels as the Markets would again get
OVERSOLD and the technicals would resist the downside.
For today, the levels of 4970 and 5025 are immediate
resistance levels and the levels of 4905 and 4860 are immediate supports on the
Charts.
The RSI—Relative Strength Index on the Daily Chart is 32.3078
and it has just moved above its Oversold area, which is Bullish. It does not
show any negative divergence or failure swings and it is therefore neutral. The
Daily MACD continues to trade below its signal line.
On the Candles, An engulfing bullish line occurred (where
a white candle's real body completely contains the previous black candle's real
body). The engulfing bullish
pattern is bullish during a downtrend (which appears to be the case with
NIFTY). It then signifies that the
momentum may be shifting from the bears to the bulls.
Having said this, it is important to note that had there been no
negative global cues, the Markets were expected to continue with their imminent
pullback. However, the weak global cues would cause a lower opening but, again,
the technicals are likely to resist to any further weakness post opening. There
are bright chances that the Markets open lower and after hovering around the
low levels of the day, improves as we go ahead in the session because any lower
opening would make the Markets OVERSOLD again.
All and all, the analysis remains the same as the Markets would
get OVERSOLD again after the weaker again. The volatility would refuse to go
away so retail investors should remain light on their positions and protect
profits vigilantly. Shorts should strictly be avoided. Overall, cautious
outlook is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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