MARKET TREND FOR
TODAY
August 21, 2012
The Markets continued to see minor correction on Friday,
with the sentiment also dented to some extent with the CAG Reports. The Markets
opened on a moderately positive note and continued to trade sideways in a
capped range while marking the levels of 5399.95 as its day’s high. The Markets
reacted precisely from these levels , which were also mentioned in our Friday’s
edition of Daily Market Trend Guide. Though this was also a technical level of
major resistance, the sentiment was further dented by the CAG Reports that came
in. The Markets gave off all of its gains as it dipped into the red and gave
the day’s low of 5341.70. It however, recovered a bit from those levels and
ended the day at 5366.30, posting a negligible gain of 3.35 points or 0.06%.
The Markets have formed a higher top and lower bottom on the Daily High Low
Charts.
Today, again expect the Markets to open on a moderately
negative note and continue with the corrective activity that we witnessed on
Friday. The Markets shall open on a quietly flat to negative note and look for
directions and the intraday trajectory would be important to influence the
trend for today.
The key levels of 5375-5400 shall continue to act as key
resistance levels.
The RSI—Relative Strength Index on the Daily Chart is 63.8206
and is neutral as it shows no negative divergence or failure swings. The Daily
MACD continues to trade above its signal line.
There are two
important things that are necessary to be noted. First, the key levels of 5400
that we have been mentioning in our previous editions of the Daily Market Trend
Guide have continued to act as key resistance and shall continue to do so and
sustainable up move shall occur only after the Markets moves past these levels.
Secondly, the Markets are showing some immediate short term signs that the
Markets have continue to show little more correction as the NIFTY has shed over
one lakh shares in Open Interest.
Having said this, it is also important to note that the
Markets moving past the levels of 5400 would be an attempt of continuing trend
reversal after making two higher highs after giving a low of 4531 in December
2011. So, it is extremely important for the Markets to move past this level of
5400 and in the same breath, no sustainable up move shall occur unless the
Markets moves past this level.
All and all, continuance of stock specific and selective
approach is advised. The Markets shall remain in a range, probably see some
bouts on either side too but more or less continue to consolidate facing stiff
resistance at 5400 levels. Heavy and aggressive positions are not advised on
either side. Overall, continuance of cautious approach is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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