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Thursday, January 12, 2012

Daily Market Trend Guide -- Thursday, January 12, 2012

MARKET TREND FOR TODAY January 12, 2012

After a breakout above 4800 levels, the Markets consolidated yesterday again with the levels 50-DMA acting as immediate resistance as the Markets spent a range bound session and ended the day with nominal gains. The Markets opened on positive note on expected lines and spent the entire session trading in a capped range. The Markets gave its intraday high of 4877.20, against the expected resistance at 4876. It however ended the day at 4860.95, posting a nominal gain of 11.40 points or 0.24%. In the process, it has formed a higher top and higher bottom on the Daily High Low Charts.

Today, expect the Markets to open on a mildly positive to flat note and look for directions. The Markets are expected to continue to consolidate as it has resisted to its 50-DMA yesterday and today, it is again likely to do so. For today, the levels of 4867, which is the 50-DMA and the levels of 4940, which is the 100-DMA of the Markets shall act as resistance with the levels of 4790-4800 acting as supports.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 57.1108 and it shows no negative divergence. It has reached its highest value in last 14-days which is bullish. The Daily MACD is bullish as it continues to trade above its signal line.

On the Candles, A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum.

Also important to note that INFOSYS is declaring the numbers, and thus with it enjoying over 10% weight in the NIFTY, it can significantly keep it volatile. More important would be the IIP Numbers which would be announced and Markets are expected to react to this.

All and all, the combination of above technical factors read along with expected news flow like IIP, the consolidation is expected to continue and it is advised to avoid taking aggressive positions on either side while continuing to protect profits as we have been doing since last several sessions. Overall, cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, January 11, 2012

Daily Market Trend Guide -- Wednesday, January 11, 2012

MARKET TREND FOR TODAY January 11, 2012

After consolidation of over a week and after near-flat closing for four sessions in a row, the Markets yesterday gave a upward breakout on expected lines as it moved past the levels of 4800 to end the day with robust gains. The Markets opened stronger than expected and resisted around 4800 levels for about an hour or so. It finally breached those levels on the upper side and went on to give the day’s high of 4855.90 and finally ended the day near the high point of the day at 4849.55, posting a robust gain of 106.75 points or 2.25%. In the process, the Markets have formed a sharply higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a mildly positive note and continue with its up move at least in the initial session. For today, the levels of 4876 and 4890 shall act as resistance an the levels of 4800-4785 shall act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 56.3113 and it shows no negative divergence. It has reached its highest value in last 14-days which is bullish. The Daily MACD continues to remain bullish as it trades above its signal line.

On the Candles, A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 3 rising windows in the last 50 candles--this makes the current rising window even more bullish.

Having said this, the levels of 4876 is the 50-DMA of the Markets and in the event of up move, the Markets are likely to resist there. On the other hand, since the Markets have moved past the level of 4785-4800, these levels shall now act as immediate support. If the Markets moves past its 50-DMA, it shall see further levels of up to 4950 but if not, then it shall consolidate again between the levels of 4790-4875 levels until it breaches those levels again.

All and all, the under current certainly remains buoyant. However, since the Markets have multiple resistances at different levels within very short span, it is still advised to keep making selective stock specific purchases and still keep protecting profits at higher levels. Positive outlook advised as overall trend continues to remain buoyant and intact.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, January 10, 2012

Daily Market Trend Guide -- Tuesday, January 10, 2012

MARKET TREND FOR TODAY January 10, 2012

The Markets continued to consolidate yesterday as it opened on a negative note, dipped to give the day’s low of 4695.45 in the morning trade. The Markets, however, spent to rest of the session in the rising trajectory as it recovered all of its opening losses to give the day high of 4758.70 to trade briefly into the green. The Markets pared some of its gains to dip into negative, but recovered again to end the day at 4742.80, posting a nominal loss of 4.10 points of 0.9%. The Markets have ended the day almost flat for the fourth session in a row and in the process have formed a similar top and lower bottom on the Daily High Low Charts.

Technically speaking, since the Markets have ended the day near the high point of the day, it is expected to open on a mildly positive note and continue with its up move, at least in the initial trade. With the mildly positive opening expected, the Markets are still overall expected to continue to remain under consolidation.

Since the Markets are overall continue to still remain under consolidation, the reading and analysis too would remain more or less same. The intraday trajectory and the volumes would continue to play critical role and the levels of 4790-4800 would continue to act as immediate resistance. Until the Markets moves past these levels, no sustainable up move can be expected and the Markets are expected to remain in broad trading range between the two blue lines shown in the charts with 4550-4800 levels.

The RSI—Relative Strength Index on the Daily Chart is 47.8609 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade above its signal line and is bullish.

Having said this, since the Markets are consolidating near the upper end of its consolidating zone / trading range, the under current can be called buoyant. But even then, since the breakout is yet to occur, the downward side risk too can be more if one sees volatility or some profit taking. Due to this, we continue to advise to refrain from avoiding shorts and taking aggressive positions on either side, while vigilantly protecting profits on higher levels. Overall cautious optimism is continued to be advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331