MARKET TREND FOR TODAY
July 9, 2012
Markets continued to consolidate on Friday too, but also ,
at the same time, continue to show resilience as it ended the day with moderate
losses after a weak start. The Markets opened on a negative note and soon gave
its intraday low of 5287.75 in the morning trade in the early hours of the
session. Thereafter, it slowly transformed itself into rising trajectory and
recovered most of its opening morning losses by late afternoon trade and traded
flat. It came off again a bit in the last hour of the trade again to recover
and finally end the day at 5316.95, posting a moderate loss of just 10.35
points or 0.19%. It has formed a parallel bar with almost similar top and
similar bottom on the Daily High Low Charts. The Markets have ended the week
with net gains of 38.05 points or 0.72%.
Today, expect the Markets to open on a moderately negative
note and look for directions. The Daily charts suggests the consolidation to
continue whereas, the Weekly Charts clearly point towards continuing up move
and upward bias. Given this reading on the technical charts, the Markets are
set to witness continuing consolidation on daily basis, but are set to have a buoyant
week ahead.
For today, the levels of 5330 and 5365 are immediate
resistance levels on the Charts whereas the levels of 5275 and 5230 are
immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 68.9438
and it is neutral as it shows no negative divergence or failure swings. The
Daily MACD continues to remain bullish as it trades above its signal line. On
the Weekly Charts, the RSI is 56.9370 and it has reached its highest value in last 14-weeks which is bullish. The
RSI has set a new 14-week high whereas NIFTY has not yet and this is Bullish
Divergence. The Weekly MACD too is bullish as it trades above its signal line.
Further to this, the NIFTY and Stock Futures have continued
to add in Net Open Interest showing a upward bias and the NIFTY PCR stands at
1.21, leaving a significant gap on the upside.
From the above reading, it can be fairly concluded that
given the structure and the reading of the lead indicators on the Daily Charts,
the Markets may continue to see the consolidation in the early part of the
week. At the same time, the Weekly charts clearly show the potential of the
further up move post this consolidation.
All and all, the intraday trajectory would be important as
the consolidation continues. Due to this, range bound movement can be seen and
some intraday profit taking bouts cannot be ruled out. Further to this, given
the reading on the Weekly Charts, shorts should strictly be avoided. While
protecting profits on the upward bouts, selective purchases can be continued to
be made. Overall, positive but cautious
optimism is advised for today as well as for coming week.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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