Tuesday, June 5, 2012

Daily Market Trend Guide -- Tuesday, June 05, 2012

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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