Thursday, September 13, 2012

Daily Market Trend Guide -- Thursday, September 13, 2012

MARKET TREND FOR TODAY                                                              September 13,2012
The Markets continued its up move on fifth day in a row but remained utterly volatile as it reacted more the German Court’s verdict than the IIP numbers which were a non event today. The Markets opened on a positive note and traded in a capped range even the IIP numbers came out. It continued to remain in a range but reacted violently just before the German Constitutional Court started with its verdict. It saw a wild two way movement but towards the end, went on to give the day’s high of 5435.55. It ended the day at 5431, posting yet another decent gain of 41 points or 0.76% while forming a higher top and higher bottom on the Daily High Low Charts.

Today, we can expect the Markets on a flat to mildly negative note and consolidate after five days of gains. The Markets are not yet out of its filter of resistance levels of 5400 and they are still below its double top resistance of 5448-5450 and thus, can consolidate or mildly correct from these levels. The intraday trajectory would continue to remain critically important.

The levels of 5448-5460 shall act as resistance for today.

The RSI—Relative Strength Index on the Daily Chart is 64.2480 an it has reached its highest value in last 14-days which is bullish. However, it does not show any bullish / bearish divergence. The Daily MACD continues to trade above its signal line. The volumes have remained bit higher than the average.

The NIFTY and Stock futures have continued to add nominal open interest and the NIFTY PCR now stands at 1.06 as against 1.01. The another external even that global markets look forward to is the announcements from Fed Reserve coming up tonight.

However, so far as technical factors go, the Markets are likely to consolidate / mildly react at these levels. In such case, at this point, aggressive long positions should be avoided and selective approach should be maintained as only selective outperformance would be seen until Markets achieves a full break out on the upside. Volatility shall stay and occasional profit taking bouts cannot be ruled out. Careful outlook is advised for today.

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


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