MARKET TREND FOR TODAY August 27, 2012
The Markets on Friday corrected on expected lines as it
opened below its key levels of 5400 and remained so for the entire session. The
Markets opened on a negative note and continued to correct, though it did so in
a extremely range bound manner. The Markets gave their day’s low of 5371 in the
mid afternoon trade. However, it recovered a bit during the rest of the session
and finally ended the day at 5386.70, posting a modest cut of 28.65 points or
0.53%. The volumes remained around its average and the Markets have formed a
lower top and lower bottom on the Daily High Low Charts.
Today, we might again see a flat opening in the Markets and
the Markets are expected to again remain directionless and trade below its key
levels in the initial trade. With no directional triggers on either side and
with the Markets below its key levels of 5400, we are not to see any runaway
rise in the Markets unless the Markets moves past those levels again.
For today, the levels of 5400 and 5440 shall continue to act
as immediate resistance and the levels of 5365 and 5320 are immediate supports
on the Charts.
The RSI—Relative Strength Index on the Daily Charts is 62.2344
and it is neutral as it shows no negative divergence or failure swings. The
Daily MACD continues to trade above its signal line. On the Weekly Charts, A Long upper shadow has occurred and it
is typically a bearish signal and indicates weakening of momentum at with this
formation on the Charts.
It is important to note that the levels of 5400-5410 are not
only pattern resistance on the Daily Charts, but on Weekly Charts too, these
levels are posing a similar pattern resistance.
Further to this, NIFTY futures have shed 5.50 lakh shares or
2.13% in open interest which increases the chances of the Markets remaining
weaker and below 5400 in immediate sessions.
Having said this, the conclusion here is that since the
Markets came back below 5400 levels,
these levels and its filters have remained immediate resistance for the
Markets. Further, in event of no comprehensive breakout, the Markets shall have
to move past these levels again for a comprehensive breakout but shall
currently trade with moderately negative bias. Range bound movements and
volatility shall remain and thus, highly selective approach is advised for
today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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