Tuesday, March 12, 2013

Daily Market Trend Guide -- Tuesday, March 12, 2013

MARKET TREND FOR TODAY                                                               March 12, 2013
The Markets traded perfectly in lines with what was analysed in yesterday’s edition of Daily Market Trend Guide. After a flat opening, it consolidated around its key resistance levels and finally ended the day absolutely flat with negligible losses. The Markets opened on a flat to moderately positive note and after briefly trading into the green, pared its morning gains to dip slightly into the negative. In the afternoon trade, the Markets perked up a bit to give the day’s high of 5971.20. However, volatility refused to go away and the Markets pared all of those intraday gains in the second half of the session. It pared those gains to dip into the red in the final minutes of the trade and ended the day at 5942.35, posting a negligible loss of  3.35 points or 0.06% still continuing to form a higher top and higher bottom on the Daily High Low charts.

Today is likely to be a similar trading session, and the Markets are expected to continue to consolidate but are likely to do so with positive bias. Expect the Markets to open on a mildly positive note and look for directions. The intraday trajectory would be important as the Markets consolidates and the levels mentioned yesterday shall continue to act as immediate resistance for the Markets.

For today, the levels of 5970 and 6010 shall act as immediate resistance. The levels of 50-DMA which is 5943.52 shall also act as resistance at Close levels.

The lead indicators are mildly positive. The RSI—Relative Strength Index on the Daily Charts is 57.1054 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front,  the NIFTY Futures have added over 1.05 lakh shares or 0.66% in Open Interest and the NIFTY PCR stands at 1.18 as against 1.15 yesterday.

The markets have shown a very typical signs of consolidation after a smart pullback. It may continue to do so today also but shall do it with positive bias. The F&O activity have shown strong put buying at lower levels indicating that in event of correction, it would be a mild one and those levels would act as support. In even of consolidation, the Markets may deliberate for a day or two and continue with its up move.

All and all, the Markets may react a bit to the IIP data coming out today, but the F&O data and the technicals clearly suggest the undercurrent to be buoyant. In event of mild correction or continuing consolidation, selective purchases may be made. While strictly avoiding shorts, any temporary downside should be utilized to make fresh purchases. Overall, positive outlook can be continued to be maintained.

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


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