MARKET TREND FOR TODAY
June 18, 2012
After a positive opening and a range bound trade in the
morning session, the Markets had a buoyant session as it ended the day with decent
gains. The Markets opened on a positive note and traded with capped gains in
the morning session. However, after that, it transformed itself into rising
upward moving trajectory and remained so for the entire session. It went to
give the day’s high of 5146.20 towards the end of the session. It finally ended
the day at 5139.05, posting a decent gain of 84.30 or 1.67%. It has formed
slightly higher top and bottom on the Daily High Low Charts and the volumes
remained moderately above average. With this, the Markets have ended the week
with net gains of 70.70 points or 1.42%.
Today’s session remain highly important for the Markets as
the Markets will deals with contradictory technical signals and the positive
news flows. It is also set to react to the Monetary Policy that RBI is set to
announce later today.
The Markets are set for a positive and buoyant opening today
following positive news flow from Eurozone. At the same time, the opening will
cause the Markets to open around its 50-DMA and the behavior of the Markets
stands critical around those levels. Further, with the RBI policy due today,
the Markets shall also react to that and thus given the technical chances of
some weakness creeping in later today, the session remain critically important.
The levels of 5200-5220 shall act as immediate resistance today.
The RSI—Relative Strength Index on the Daily Chart is 60.2573
and it shows no failure swing. However,
the NIFTY has reached its highest value in last 14-days whereas RSI has not and
this is BEARISH DIVERGENCE. The Daily MACD continue to trade above its signal
line. On the Weekly Chart, the RSI stands neutral at 50.7644. Weekly MACD
trades below its signal line.
Having said this, if we look purely at the technical charts,
not counting any other external positive news flow, then the Markets has
theoretical chances of weakening a bit as the day progresses and some minor
profit booking may be seen. However, we will see positive Europe opening likely
to aid this and possible the Markets may react to the RBI Announcements before
that. There are chances that the Markets
reacts after RBI Announcements but in that case, we will have more technicals reasons
for that. So, with this largely contradictory reading, the volatility is
something that will remain ingrained in the Markets today.
All and all, given this reading, it is thoroughly advised to
remain extremely cautious for today. The
Markets shall remain volatile and aggressive position should be avoided and
highly selective approach should be taken. Profits should be protected at
higher levels. The undercurrent, however remains intact but profit taking bouts
cannot be ruled out. Cautious optimism is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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