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Technically speaking, the Markets have ended the day yesterday at the high point of the day and they should open on a positive note and continue with the up move at least in the initial session. However, given that the Markets are still in a range it is expected that Markets shall open on a flat note and look for directions. Intraday trajectory would continue to remain crucial.

The Markets yet to move past the levels of 6042 which is its immediate top. Therefore, the levels of 6040 and 6065 shall continue to act as resistance. The levels of 5950, which it broke on the upside shall act as immediate support for today, as well as for coming days.

Lead indicators and F&O data throw a mixed picture and point towards consolidation to continue. The RSI--Relative Strength Index on the Daily Chart is 64.9180 and it is neutral as it shows no negative divergences or failure swings. The Daily MACD, too is bullish as it trades above its signal line. On the other hand, NIFTY Futures have continued to shed 3.66 lakh shares or 2.28% in Open Interest which shows that the yesterday's gain in the second half of the session was more on account of short covering than fresh buying.

Having said this, it would be important to see if this gets replaced with fresh buying. Otherwise, we will again see the Markets consolidating and moving in a capped range with the levels mentioned above acting as immediate support. This will also have some amount of volatility ingrained in it.

All and all, the fresh sustainable up move shall occur if the Markets moves past the levels of 6042. Until this happens, we will continue to consolidate in a range. Given the structure of the Markets, shorts should continued to be avoided and fresh longs should be very selectively taken while protecting profits vigilantly. While avoiding aggressive positions, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,