Daily Market Trend Guide -- Monday, September 05, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets saw a volatile session on  Friday wherein it consolidated moving in either direction and finally ended the day with modest gains in a session that witnessed very low volumes. In the process, the Markets have continued to form a higher top and higher bottom on the Daily High Low Charts.

Again today, we face a sharp contradiction in domestic technical indicators and global cues. While global cues represent weakness, all technical indicators point towards continuing pullback. However, the Markets are expected to take a middle path.

This means, expect the Markets to open on a negative note following weak global cues but later in the day, also expected it to recover as technicals are expected to take over and the Markets expected to show resilience. For today, the levels of 5060 and 5095 are expected to act as resistance and the levels of 4990 and 4960 are expected to act as supports.

All lead indicators point towards pullback to continue. The RSI — Relative Strength Index on Daily Chart is 45.7266 and it has reached its highest value in last 14-days which is BULLISH. Also, RSI has given a new 14-period high, whereas NIFTY has not as yet. This is BULLISH DIVERGENCE. The Daily MACD has reported a positive crossover as it now trades above its signal line. On the Weekly Charts too, RSI is 39.4384 and has move out from bottoming out zone, which is a good sign. Further, Weekly MACD trades below its signal line but is now in OVERSOLD range.

FIIs and DIIs have remained net buyers in both Cash as Derivative segment.

However, volumes have remained a concern. Thus, given the above reading, the most likely scenario can be that Markets may open down following global weakness but may show resilience and recover as the day progresses as overall technical view remains on the continuation of pullback. While it is advised to keep protecting profits at higher levels, it is strongly advised to avoid shorts. Cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

http://www.mymoneyplant.co.in/

 +91-9825016331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, August 29, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets on Friday, despite being Oversold, went on to kneel under pressure seeing heavy caution before Fed Announcements later that day went on to end with further losses and ended the day forming a lower top and lower bottom on the Daily High Low Charts.

Today, the Markets are likely to open on a positive note and we can expect to see a relief rally post Friday’s developments.

For today, we can expect the Markets to open on a positive note and trade into positive and possibly further strengthen, depending largely on the intraday trajectory that it shall form. For today, the levels of 4780 and 4825 are expected to act as resistance and the levels of 4720 and 4690 are likely to act as supports. All lead indicators continue to remain OVERSOLD on both Daily and Weekly basis.

The RSI—Relative Strength Index on the Daily Chart is 24.6443 and it does not show any failure swing and it is grossly OVERSOLD. NIFTY has made a new 14-day low but RSI has not and this is BULLISH Divergence. The Daily MACD Continues to trade below its trigger line.

On the Weekly Charts too, the RSI stands OVERSOLD at 28.0317. The Weekly MACD continues to trade below its signal line and that too is in OVERSOLD range.

Further to this, the NIFTY is trading near its Crucial Double Bottom Support on both Daily and Weekly Charts.

Keeping the above technicals factors in view, we can fairly expect a relief rally and stability to return to the markets as the Fed announcements has remained a non-event. Also, FIIs have remained net buyers in both Cash and F&O Segments.

All and all, the Markets are grossly OVERSOLD and with no negative triggers today, we can expect a relief rally to begin and sustain subject to positive intraday trajectory and Volumes. Stock specific activities would be seen. Positive outlook is advised for today.

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