Tuesday, September 4, 2012

Daily Market Trend Guide -- September 04, 2012

MARKET TREND FOR TODAY                                                       September 04, 2012
What started out as a relatively buoyant session, turned out to be a dampener   as the Markets pared all of its opening gains during the course of the session and ended the day with very negligible gains on low volumes. The Markets opened on a relatively better note and gave its intraday high of 5295.80 in the very early minutes of the trade. The Markets thereafter slowly and gradually pared all of its gains as it transformed into falling trajectory. In the mid session, it dipped into the red and gave its intraday low of 5243.15. It did made an attempt to recover as it came back into the green but drifted again to trade in capped range for the rest of the session. It finally ended the day at 5253.75, posting a very negligible loss of 4.75 points or 0.09% forming a slightly lower top but slightly higher bottom on the Daily High Low Charts.

Today’s analysis would remain more or less similar to that of yesterday. The Markets have managed to hang on around 50-DMA levels at Close as it has closed just a notch below that. The Markets are expected to open on a mildly positive note and look for directions. The behavior of the Markets vis-à-vis the levels of 50-DMA would be critically important.

The levels of 5280 and 5310 are resistance levels and supports come in at 5230 and 5205 levels.

The RSI—Relative Strength Index on the Daily Chart is 44.0302 and it has reached its lowest value in last 14-days which is bearish. It does not show any bearish or bullish divergence. The Daily MACD continues to trade below its signal line.

Having said this, as mentioned earlier, the behavior of the Markets vis-à-vis the levels of 50-DMA is critically important. The Markets will have to trade above those levels, in order to avoid any further weakness creeping in.

All and all, range bound but volatile trade may be expected. The Markets may remain range bound but at the same time, volatile movement on either side may not be ruled out. The levels of 50-DMAat Close would be important because further weakness cannot be ruled out if the Markets dips below that critical levels. Sectoral outperformance would be observed. Highly selective approach with caution is advised for today.

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


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