The Markets continued to inch up wards yesterday and might have ended the day with modest gains, but it has continued to remain in OVERBOUGHT range with  continuing Bearish Divergence on the Daily Charts.

For today, expected the Markets to open on a flat to mildly negative note and look for directions. Given the structure of the Charts and going by Pattern Analysis, the correction in the Markets is now long overdue and almost imminent as the structure of the Markets on Daily Charts is getting unhealthy. We can expect a flat to mildly negative opening and also we can expect the Markets to  remain in falling trajectory going ahead in the session.

For today, the levels of 5750 continue to  be immediate resistance with the supports coming in at 5680 and 5640 levels.

The RSI--Relative Strength Index on the Daily Chart is 73.78. The NIFTY has set a new 14-day high again, but RSI has not and this is BEARISH DIVERGENCE. This reading is continuing since last 3 sessions and this provides all technical reasons for the Markets to have a long overdue correction.

Though both NIFTY and Stock futures have shown addition in Open Interest, the trend has shown a mixed pattern so far as Index components are concerned.

Having said this, we continue to give the same reading and reiterate our analysis that aggressive buying in the Markets should be avoided at these levels. The Pattern Analysis and the technical indicators strongly point towards imminent correction, even though a minor one. The Markets shall get unhealthy if it continues with this structure on the Charts. So, continuing with our yesterday's analysis, highly selective approach with cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,