Daily Market Trend Guide -- Tuesday, May 31, 2011

MARKET TREND FOR TODAY

The Markets yesterday opened on a positive note on expected lines but also consolidated as expected and finally ended the day of typical consolidation with low volumes with negligible loss but in the process have continued to give a higher top and higher bottom on the Daily High Low Charts.

For today, the Markets are expected to open on a positive note and may trade in the positive at least in the intraday trade.

With the Markets expected to open on a positive note, two factors would decide if the Markets will continue with its up move or would continue to consolidate. That would be the intraday trajectory that the Markets would form post opening and the volumes, that have remained a concern over couple of day, especially yesterday when they were much below its average.

All lead indicators continue to remain in place. The RSI — Relative Strength on the Daily Chart is 45.5075 and is neutral as it shows no negative divergence or failure swings.

Daily MACD on the Daily Charts has given a fresh buy signal after almost 28 sessions as it has reported a positive crossover and it now trade above its signal line.

Apart from the above reading, further OI in stock and Nifty futures have been added with the  widening of discount. This also suggest some addition of short positions but widening of discount without much fall also suggest discomfort at lower levels.

All and all, there is no consensus on the down side but at the same time, Markets lacks conviction to move up, though the bias continues to remain on the upside given the technicals and F&O Data. It is advised to continue to maintain stock specific approach making selective purchases strictly avoiding shorts. Positive optimism 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, May 30, 2011

MARKET TREND FOR TODAY

The Markets continued its up move on Friday too as ended the day with gains on the second day in a row to end the week flat with net loss of just 10 points and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts.

For today, expect a flat to positive opening in the Markets. With the Markets expected to open on a flat to positive note, the levels of 5520 and 5565 shall act as resistance and the levels of 5450 and 5430 shall act as support.

All lead indicators point towards potential confirmation of attempted reversal of the Markets. The RSI -- Relative Strength Index on the Daily Chart is 45.7192. RSI has reached its highest value in last 14-days which is BULLISH. Also, RSI has set a new 14-day high but NIFTY has still not, which is BULLISH DIVERGENCE. The Daily MACD however continues to trade below its signal line but is likely to give a buy signal given the continuation of the trend.

On the Weekly Charts, the RSI is 44.1693 and is neutral as it shows no negative divergence or failure swings. On the Candles, A Hammer occurred. Hammers appear after a significant decline or if the Security is Oversold, which is the Case is NIFTY (i.e. significant decline) to be valid. This usually indicates formation of support level and is thus considered a bullish pattern. Also, A Handing Man occurred. Since this has occurred after a downtrend, which is the case with NIFTY, it is called a Bullish Hammer.

Given this reading, the volumes continue to remain a concern and thus we will need continued and increased participation in the markets to capitalize on the above readings. Given the F&O Data, the NIFTY and Stock futures have continued to add Open Interests.

All and all, the Markets have limited downside this week with overall bias remaining towards upside. It is strictly advised to refrain from shorts and continue to make selective purchases. Even if we see some consolidation for a day or two, the over all bias remains on the upside.

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