MARKET TREND FOR TODAY
June 5, 2012
Precisely on the expected lines, the Markets staged a smart
recovery after weak opening and has so far held on to the bottoms made on May
18th. The Markets opened on a weaker note and with a gap down on
back of weak global cues and gave its intraday low of 4770.35 in the morning
trade. However, it thereafter transformed into upward rising trajectory, though
in a bit volatile manner and remain in that trajectory for the rest of the
session. It not only recouped its morning losses but went on to trade in the
positive too. Towards the end of the session, it gave intraday high of 4858.30,
recovering almost 80-odd points from its day’s low and ended the day near the
high point at 4848.15, posting a gain of 6.55 points or 0.14%. It continued to
form a lower top and lower bottom on the Daily High Low Charts.
Expect the Markets to open on a flat t o moderately positive
note today and look for directions and intraday trajectory would continue to
remain critically important. The Markets have so far held on to the bottom
formed on May 18th and it would be important for the Markets to
sustain above those levels at Close as the Markets are still not completely out
of woods as of today.
The levels of 4875 and 4930 are immediate resistance on the
Charts and the levels of 4790 and 4740 are immediate supports on the Charts.
All lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 36.3132 and is neutral as it shows no
negative divergence or failure swings. The Daly MACD continues to trade above
its signal line.
At this juncture, it is important to note that the Markets
are not completely out of woods as yet though it has held on the its previous
bottom and has formed a minor Double Bottom supports on the Daily Charts. So, it would be important for the Markets
that it maintains a positive trajectory post opening and remains above its critical
support levels.
All and all, with no potential bottom formation confirmed
and with the Markets struggling to keep the current support levels intact, the
preservation of this Double Bottom support would be crucially important. It is advised
to still avoid aggressive positions and keep protecting profits at higher
levels. Overall, continuation of cautious approach is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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