MARKET TREND FOR TODAY
June 7, 2012
The Markets had a thoroughly delightful session which was
attributed to rate cut hopes on June 18th as well as meeting of the
PM with key officials but it was thoroughly supported by technicals as well.
The Markets, though it continue to remain in the broad range mentioned by us in
our yesterday’s edition but ended with robust gains. The Markets opened on a
positive note and continued to trade with capped gains. Thereafter, in the
second half of the session, the Markets strengthened further as it went on to
give the day’s high of 5010.45. It finally ended the day near the high point of
the day at 4997.10, posting a robust gain of 133.80 points or 2.75%. It has
formed a sharply higher top and higher bottom on the Daily High Low charts with
greater volumes.
The Markets have closed yesterday near the high point of the
day and so technically speaking, they are expected to continue with their up
move, at least in the initial session. Having said this, with global cues
highly supportive, we are expected to see yet another gap up opening today and
the Markets are expected to open between its 200-DMA and 50-DMA.
For today, the levels of 5064 (200 DMA) and 5096 (50 DMA)
are immediate resistance on the Charts and the supports are likely at 4950 and
4925 levels.
The RSI—Relative Strength Index on the Daily Chart is 51.9313
and it has reached its highest value in last 14-days which is bullish. It does not show any negative or
positive divergence.
Having said this, it is slightly important to note that the
NIFTY has shed nominal Open Interest of 18,000 shares. This signifies a slight
booking of profits at higher levels. The
Stock futures have went on to add net open interest.
All and all, the opening of the Markets is likely to be
above its 200-DMA and it would be critical to see the behavior of the Markets
around those levels because, even with
the yesterday’s rise, we are still within the broad range defined in our
yesterday’s edition. So, intraday trajectory would be important and it is
advised to use this perfect pullback to protect profits on existing positions
as minor profit taking or consolidation cannot be ruled out. Fresh purchases
may be made selectively. Positive
outlook is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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