Monday, March 11, 2013

Daily Market Trend Guide -- Monday, March 11, 2013

MARKET TREND FOR TODAY                                                                March 11, 2013
Markets staged a decent rally on Friday and ended the day with smart and decent gains for the fourth day in a row on back of favoring technicals  and supporting global cues. On back of strong technicals and positive global cues, the Markets opened positive and on a fairly decent note and continued to trade with capped gains in the first half of the session. Further to this, it made an upward breakout from the intraday sideways trend and perked up further in the second half of the session. It went on to give the day’s high of 5952.85 in the final minutes of the trade. It hovered around those levels for a while and finally ended the day at 5945.70 posting a robust gain of 82.40 points or 1.41% while forming a sharply higher top and higher bottom on the Daily High Low Charts.

Today would be an important session for the Markets. We are likely to see a flat to mildly positive start to the Markets but at the same time, it is also likely to take some breather from the upward move that it has been witnessing. The pattern resistance levels and an moving average are likely to pose some resistance which can result into mild consolidation.

For today, the levels of 5930 and 5970 levels are likely to act as pattern resistance and the levels of 5945 shall act as resistance at Close levels in form of its 50-DMA.

The lead indicators are fairly bullish. The RSI—Relative Strength Index on the Daily Chart is 57.4704 and it has reached its highest value in last 14-days which is bullish. It does not show any bearish or bullish divergence. The Daily MACD is bullish as it now trades above its signal line. On 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 5 rising windows in the last 50 candles--this makes the current rising window even more bullish.

On the derivative front, NIFTY Futures have shed over 4.53 lakh shares or 2.67% in net open interest. This shows some mild profit taking and also some short covering, especially in the up move that was seen in the second half of the session.

Having said this, it is important for the Markets to consolidate a bit before it prepares itself of a fresh up move.  If the Markets mildly corrects / consolidates and then moves up again, it would then confirm a trend reversal from a mere pullback.

All and all, it is likely that the Markets briefly consolidates or mildly corrects after four days of rise. Any consolidation / mild correction would be healthy for the Markets as it would prepare itself for a fresh up move. Any up move that shall occur after a brief consolidation / mild correction will have all chances to result into and confirm a trend reversal. It is advised to guard profits in the immediate short term and use any short term consolidation to make selective purchases. Overall, positive outlook is continued to be advised.


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


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