Monday, June 11, 2012

Daily Market Trend Guide -- Monday, June 11, 2012

MARKET TREND FOR TODAY                                                        June 11, 2012
The Markets on Friday corrected on expected lines in the first half of the session but smartly recovered towards the end to finish the day as well as the week with the biggest gains since the Month of January. The Markets opened weak on weal global cues and continued to correct for the most part of the session. It traded with capped losses in the initial session and weakened further to give the day’s low of 4994.80. However, the Markets saw over 80-odd points recovery in the last hour and half of the trade as it not only recovered from its lows, but even went on to give the day’ high of 5084.45. The Markets finally ended the day at 5068.35, posting a gain of 18.70 points or 0.37%. The Markets have formed a higher top but lower bottom on the Daily Charts. It has ended the week with net gains of 226.75 points or 4.62%.

The Markets have consolidated intraday on Friday and today, since they have ended the day near the high point of the day, are expected to open on a positive note and continue with the up move at least in the initial session. The global cues are supportive of this, but it would be imperative for the Markets to end the day above the 200 and 50-DMA and thus intraday trajectory would be important.

The levels of 5095 and 5135 would act as resistance and the levels of 5060 and 5005 would act as immediate supports on the Charts.

The RSI—Relative Strength Index on the Daily Chart is 57.4547 and it has reached its highest value in last 14-days which is bullish. It does not show any negative or positive divergence. The Daily MACD continues to trade above its signal line and is therefore bullish. On the Weekly Chart, the RSI is 48.2571 and is neutral without showing any failure swings or  any divergence. The Weekly MACD however remains bearish as it trades below its signal line.

Having said this, it can be fairly concluded that the Markets are set to have a positive and strong start to the week but shall have to maintain a positive trajectory and maintain opening gains so as to maintain the levels above of 200 and 50-DMA to avoid any correction and remain in state of consolidation. However, at the same time, some amount of consolidation cannot be ruled out going further into the week.

All and all, with the positive start expected the Markets may hover in between 50 and 100-DMA on the charts. The up move should be smartly utilized to book profits on existing positions while new positions may be very selective taken in less aggressive manner  while vigilantly protecting profits at higher levels. Overall, positive approach is advised for the day. 

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


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