MARKET TREND FOR TODAY
July 4, 2012
The Markets in
yesterday’s session continued to consolidate and remain flat for the second day
in a row as it spent the session again in a very narrow range and ended the day
with nominal gains. The Markets opened on a decently positive note and made
their day’s high of 5317 in the very early part of the session. This was
against the possible resistance levels of 5325 mentioned by us. It started drifting
downwards and dipped into the red briefly in the second part of the
session. It however, gradually recovered
again to finally end the day at 5287.95, posting a nominal gain of 9.35 points
or 0.18%. The volumes continued to hover around its average. The Markets have a
higher top and a similar bottom on the Daily High Low Charts.
Today’s analysis remains more or less similar to that of
yesterday as the Markets have continued to consolidate after a strong up move
on Friday and the undercurrent remains buoyant. Today, we can again expect the
Markets to open on a flat to mildly positive note and look for directions.
Being in consolidation phase, the intraday trajectory would continue to remain
critically important.
The levels of 5230 and 5272 are immediate resistance on the
charts and the levels of 5245 and 5210 on the charts.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily chart is 67.9991 and it has reached its highest
value in last 14-days which is bullish. It does not show any negative or
positive divergence. The Daily MACD continues to remain bullish as it trades
above its signal line.
The another factor that point towards the undercurrent
remaining buoyant is the fact that apart from the NIFTY and the stock futures
which have been adding Open Interest in the times of consolidation, the Rupee
yesterday too appreciated pointing towards possibility of some more up move
before the Markets consolidate again.
All and all, with the undercurrent remaining buoyant, the
Markets will continue to consolidate but
with upward bias. The volumes would be required for any sustainable upward
move. Profit taking bouts cannot be ruled out but the movement will remain
narrow and ranged while the Markets consolidates. Shorts should be strictly
avoided as there are no triggers for this and undercurrent remains intact. Very
selective and positive approach with protection of profit at higher levels is
advised.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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