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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