MARKET TREND FOR TODAY
September 12, 2012
Markets saw relative out performance as compared to its Asian
peers on stronger European beginning as it recovered smartly from its opening
and day’s lows and ended the session with modest gains for fifth day in a row.
The Markets opened on a negative note and it traded negative in the first half
of the session while giving day’s low of 5332.10 in the early morning trade.
Thereafter, while trading in a capped range, the Markets made feeble attempts
to recover and in the mid afternoon trade, it traded near its previous day’s
close. In the last hour and half of the trade, the Markets saw further strength
coming in as it went on to give the day’s high of 5393.35. It finally ended the
day at 5390, posting a modest gain of 26.55 points or 0.50% while forming a
higher top and lower bottom on the Daily High Low Charts.
The Markets are poised at a very critical juncture now. The
expected positive opening will make the Markets open in between its resistance
zone. The lead indicators show a contradictory picture. Further the external
happenings too show contradiction to react to. Positive opening is expected but
it would be critical to see the behavior of the Markets if 5400-5460 zone and
it would be critically important for the Markets to sustain above the levels of
5400-5410.
The levels of 5410 and 5448 are immediate resistance levels
on the Charts.
The RSI—Relative Strength Index on the Daily Chart is
60.5137 and it shows no failure swing. But the NIFTY has set a new 14-day high
but RSI has not. This is BEARISH DIVERGENCE. On the other hand, the Daily MACD
has reported a positive crossover and it now trades above its signal line. This
is a contradictory reading.
Further to this, Markets have react to the IIP numbers
coming out today, which are expected to be mildly positive. Again, on the other hand, the possibilities of immediate
Petrol and Diesel price hike have been ruled out by the core committee. This is
again a negative.
So, there are contradictions to react to on the technical
charts as well as the externals. So, the key would be to see if the Markets
moves past the resistance zone of 5410-5448 or it again consolidates and gives
up later.
All and all, given these contradictions, there are chances
of Markets remaining volatile over and above being in a range. Though shorts
may strictly be avoided, occasional bouts of some minor profit taking cannot be
ruled out. Aggressive buying too should be avoided while vigilantly protecting
profits. Overall, cautious outlook is continued to be advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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