Wednesday, August 29, 2012

Daily Market Trend Guide -- Wednesday, August 29, 2012

MARKET TREND FOR TODAY                                                          August 29, 2012
The Markets continued to drift lower for the third day in a row but the session remained quite volatile as the Markets swung either side and finally ended the day with modest losses. The Markets opened on a moderately positive note and gave its intraday high if 5359.25 in the very early seconds of the trade. After this, the Markets drifted lower and dipped into the red. After making a feeble attempt to recover, the Markets saw the pressure returning as it again drifted lower and went on to give the day’s low of 5312.60. However, it also saw a sharp recovery in the second half of the trade but finally ended the day at 5334.60, posting a modest loss of 15.65 points or 0.29%. It has continued to form a lower top and lower bottom on the Daily High Low Charts.

Expect the Markets to open again on a flat note and look for directions. Today, we enter into penultimate day of expiry of current derivative series and the session for today shall remain dominated heavy rollover centric activities. The intraday trajectory shall continue to remain important but at the same time, volatility too is expected to exist.

The levels of 5400 remains key resistance levels for the Markets and the immediate supports come in at 5300 and 5280 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.1330 and it has reached its lowest value in last 14-days which is bearish. Further, the RSI has set a new 14-day low whereas NIFTY has not yet and so this is a Bearish Divergence. The Daily MACD too has reported a bearish crossover and thus now trades below its signal line which too is a bearish indicator. 

As seen above, all daily lead indicators point a weak picture for the Markets. However, we may also see some intermittent pullbacks and this are likely because of the rollover centric activities. The Markets are likely to remain as volatile as yesterday, but the overall bias remains on the downside.

All and all, the immediate short term indicators remain weak. The negative sentiments fuelled by chaos at the Centre are also likely to weigh on the Markets for the immediate short term. The Markets may see two way swings due to rollover fuelled volatility but overall bias continues to remain on the downside. Highly stock specific approach with cautious outlook for the day is advised.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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