Daily Market Trend Guide -- Thursday, March 31, 2011

MARKET TREND FOR TODAY

The Markets yesterday also continued its up move for the seventh day in a row to end again with decent gain and in the process have also continued to form higher top and higher bottom on the Daily High Low charts. Today, expect the Markets to open on a flat to moderately positive note and look for directions.

Now, at this juncture, before we proceed further for any analysis, it becomes important to point out here that the Markets have become artificially over heated and technically too now trades at a highly risky levels and such rise gets unsustainable especially the manner in which it is achieved.

For today, the levels of 5805 and 5825 may act as resistance levels and the levels of 5725 and 5630 may act as supports.

The RSI—Relative Strength Index on the Daily Charts is 66.4146 and continues to remain bullish as it has reached its highest value in last 14-days and does not show any negative divergence. The Daily MACD continues to trade above its signal line.

We again point out at this juncture that the Markets have risen completely defying the pattern analysis and also the fact that it has moved past its important DMAs as if it never existed. Such a rise gets risky and difficult to sustain as some correction / consolidation is necessary to make it healthy. Also, as per the pattern analysis, even with the rise the 100 DMA has continued to fall, slowly but steadily and may cut rising 200 DMA from above. Thus, even a little correction from these levels is likely to give a negative crossover of averages. In continuation of our yesterday’s advise, we continue to maintain to now completely stay away from making any long positions as the rise is getting unsustainable with every passing session. Continue to protect long profits at higher levels and avoid fresh positions. Highly cautious outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in 
+91-9825016331

milanvaishnav@mymoneyplant.co.in 
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Wednesday, March 30, 2011

MARKET TREND FOR TODAY

The Markets continued its rise for the sixth session in a row to close yet again with decent gain and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts. Following stable Asian Markets and positive Close in the US, we are expected to open on a positive note and trade in the positive at least in the initial trade with all possible chances that it consolidates later in the session.However, even if the Markets opens and trade in the positive, there are fair chances that the Markets may see some correction / consolidation which is long overdue. For today, the levels of 5775 and 5800 shall act as resistance and the levels of 5680 and 5615 shall act as supports on the downside.
The RSI—Relative Strength Index on the Daily Chart is 64.1783 and it has reached the highest value in last 14 days which is Bullish. However, it does not show any negative divergence. The Daily MACD continues to trade above its signal line.

At this juncture, it becomes very important to note that the NIFTY has risen almost 380 points and the Sensex almost 1600 points in six straight sessions. During this rise, it has totally disregarded key pattern resistances, and its 200-DMA and 100-DMA and thus, this gets unsustainable in the long run and some correction becomes imminent and long overdue in such case, which would be in fact healthier for the Markets. Also, since the Indian Markets have completely outperformed its Asian Peers, there are all chances that it consolidates and corrects even when the Asian Markets trades strong. With the Markets coming off some 40-odd points yesterday, that levels becomes a minor temporary resistance. All and all, it is strongly advised not to get carried away with the unabated rise that the Markets are seeing as it now getting clearly dangerous at higher levels. Continuation of extreme caution is advised while taking long positions. Cautious outlook is advised for today. - Milan Vaishnav, Consulting Technical Analyst, MyMoneyPlant co in

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in 
+91-9825016331

milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Tuesday, March 29, 2011

MARKET TREND FOR TODAY

As mentioned above, the Markets  continued its up move for the fifth session in a row, though not as strongly as the previous session, but ended the day with moderate gains and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts.

The Markets have Closed just below its 200 DMA of 5691 and this level would act as important resistance at Close levels.

For today, expect the Markets to open on a flat to moderately negative note and look for directions which would again depend upon the intraday trajectory that the Markets forms. For today, the levels of 5700 and 5744 shall act as resistance and the levels of 5640 and 5610 shall act as supports.

The RSI—Relation Strength Index on the Daily Chart is 61.9252  and it does not show any negative divergence. It has reached its highest value in last 14 days which is Bullish. The Daily MACD too continues to trade above its signal line.

At this juncture, it is important to note that the Markets have Closed just a notch below its 200-DMA and this is likely to act as resistance at Close. Secondly just above this level is the 100 DMA at 5744 which can also be considered as another resistance. Also, so far as the structure of the Chart goes, the 100 DMA is in the process of giving a negative crossover as it is likely to cut 200 DMA from above as the same is falling and the 200 DMA is rising.

All these readings suggests that the up move in the Markets may be capped for the short term and we may see some consolidation / correction creeping in as this is much required and also healthy for the Markets in the long run. It is thus advised that any long positions should be taken very selectively while continuing to protect profits at higher levels. Cautious approach is advised for today.

Milan Vaishnav, Consulting Technical Analyst, www.MyMoneyPlant.co.in   +91-9825016331 milanvaishnav@mymoneyplant.co.in milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, March 28, 2011

MARKET TREND FOR TODAY

 

The Markets on Friday saw an relentless up move and closed near the high point of the day and in the process have formed a distinct higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a moderately positive note and look for directions. Though Markets are likely to open on a moderately positive to flat note, even with some positive opening, today’s trend would continue to remain critically dependent upon the intraday trajectory that the Markets form.

The Markets today are likely to resist to its 200-DMA levels of 5688 and the  behavior of the Markets vis-à-vis these levels shall decide the trend for today as well as coming days. For today, the levels of 5688 shall act as resistance and the levels of 5625 and 5580 shall act as resistance.

The RSI—Relative Strength Index on the Daily Charts is 60.9695 and it does not show any negative divergence. It has reached its highest value in 14-days and this is BULLISH. The Daily MACD continue to trade above its signal line. On the Weekly Charts, the RSI is 50.9149 and its neutral as it does not show any negative divergence or failure swings. The Weekly MACD continues to remain in sell mode as it trades below its signal line.

Given the above technical reading, and the overall pattern of the Charts and given the fact that this is the expiry week and the Markets have risen over 300 points in last week, some consolidation / correction is imminent and in fact would be healthy for the Markets in the long run.

All and all, there are chances that post positive opening, we may see some consolidation happening at higher levels. It is advised to continue to protect profits at higher levels and to adopt ultra selective stock specific approach in taking fresh long positions. Continuation of cautious approach is advised for today.

Milan Vaishnav, 

Consulting Technical Analyst,
http://www.mymoneyplant.co.in/
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com