Monday, January 28, 2013

Daily Market Trend Guide -- Monday, January 28, 2013

MARKET TREND FOR TODAY                                                                    January 28, 2013
After persisting weakness for couple of days, the Markets witnessed a welcome relief rally on Friday as it ended the day with decent gains while remaining in positive trajectory for the entire  session. The Markets opened on a moderately positive note as expected and traded in a capped trading range in the morning trade. It also momentarily dipped into the red to give the day’s low of 6014.45. However, it soon transformed itself into rising trajectory and kept moving up gradually through out the rest of the session. Towards the end, it gave its day’s high of 6080.55. It maintained those levels until the end of the session and finally ended the day at 6074.65, posting a decent gain of 55.30 or 0.92%, while forming a higher top and similar bottom on the Daily High Low Charts.

Today, expect the Markets to open on a moderately positive note again and continue with its up move that we witnessed on Friday, at least in the initial trade. Today, we can see some continuation in the pullback that we saw after couple of days of weakness but intraday trajectory would continue to dominate the trend for today. Further, we enter the expiry week for the current derivative series and the trade is likely to remain dominated with rollover centric activities.

For today, the levels of 6094 and 6125 shall act as resistance and the supports come in much lower at 6030 and 5980.

The RSI—Relative Strength Index on the Daily Chart is 61.5848 and it is neutral as it shows no failure swings or bullish or bearish divergence. The Daily MACD continues to remain bearish as it trades below its signal line. On the Weekly Charts, the RSI is 69.6242 and though it does not show any failure swings but the NIFTY has set a new 14-week high but RSI has not and this is Bearish Divergence or weekly charts.

The NIFTY futures  has added net OI which is a positive sign for the Markets.

Given this reading on Daily and Weekly Charts, we may see some short term rally if the Markets moves past 6095 levels. However, little correction cannot be ruled out in this week as per the reading on the Weekly Charts.

All and all, short term upward momentum can continue and selective out performance can be seen. Selective purchases can be continued to be made. Overall, though some consolidation / minor correction cannot be ruled out at later stage at bit higher levels again, the overall trend and undercurrent continues to remain intact. Positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,