MARKET TREND FOR TODAY
June 13, 2012
After taking a breather for a day, the Markets resumed its
up move as it ended the day yesterday with decent gains after a negative start
as the dismal IIP growth numbers further fueled the hopes for a imminent rate
cut. The Markets opened negative and gave intraday low of 5015.15 in the
morning session. It traded in the range until the IIP numbers were announced
and after the dismal number coming in, it converted itself into rising
trajectory and went on to give the intraday high of 5128.90. It ended the day
at 5115.90, posting a decent gain of 61.80 points or 1.22%. In the process, it
has formed a similar top but lower bottom on the Daily High Low Charts. The
volumes remained moderately higher than the previous session.
Today, expect the Markets to open flat and mildly consolidate in the initial session, but
speaking purely on technical grounds, the Markets have closed above their 200
and 50-DMA and these levels should technically act as supports in the event of
consolidation.
The levels of 5140 and 5195 are immediate resistance levels
on the Charts and the levels of 5085 and 5065 are expected to act as supports.
The lead indicators point towards continuing uptrend. The
RSI—Relative Strength Index on the Daily Chart is 60.6688 and it has reached
its highest value in last 14-days which is bullish. It does not show any negative
divergence. The Daily MACD too remains bullish as it trades above its signal
line.
Both NIFTY and stock futures have went on to add net Open
Interest and thus, the F&O Data too supports possibility of continuation of
uptrend. However, on the Candles, An Engulfing Bearish Line has occurred. If the engulfing bullish pattern occurs
during an uptrend (which appears to be the case with NIFTY), it may be a last
engulfing top which indicates a top.
The test to see if this is the case is if the next candle closes below
the top of the current (white) candle's real body.
Given the above reading, it can be fairly concluded that the
undercurrent certainly remains buoyant and the uptrend remains intact, but at
the same time, there are fair amount of chances that the Markets mildly
corrects or consolidates. In that case, the levels of 200-DMA shall act as
support with the levels of 5125 acting as immediate resistance.
All and all, the Markets
shall continue to remain volatile and likely to see intermittent profit
taking bouts despite the trend remaining intact. So, while remaining selective
in making new purchases, it is advised to continue to protect existing profits
at higher levels. Shorts should strictly be avoided. Overall, cautious optimism
is advised for the day.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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