Daily Market Trend Guide -- Friday, May 20, 2011

MARKET TREND FOR TODAY

The Markets spent the entire session in a very narrow range, again heading nowhere on lower than average volumes. However, in the process, it has formed a lower top but slightly higher bottom on the Daily High Low Charts.

Today is going to be no different than last couple of sessions as the Markets are likely to open on a flat note and look for directions again. With the Markets expected to open flat, the intraday trajectory and especially the volumes will play key role in determining the trend for today as well as for coming day. For today, the levels of 5460 and 5495 shall act as resistance and the levels of 5405 and 5380 shall act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on Daily Charts is 36.0304 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line. On the Weekly Charts, the Markets continues to trade near the trend line support of the rising trend line. Again, as like in last couple of sessions, the Markets have continued to add Open Interest signifying short positions. Though FII activity have remained muted in last 3-4 sessions, they have remained net buyers, though of small quantity.         

 
All and all, indecisiveness shall continue in the Markets until the markets move past  the levels of 5440-5445. Until this happens, the Markets may continue to trade volatile and range bound on lower volumes. Again, while avoiding shorts, 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 -- Thursday, May 19, 2011

MARKET TREND FOR TODAY

The markets had an purposeless session yesterday as it ended the day with moderate losses after remaining in very narrow range throughout the session, though it has continued to form a lower top and lower bottom on the Daily High Low Charts.

For today, expect the Markets to open on a flat note and look for directions. Today’s analysis remains more or less in line with yesterday’s as the Markets are likely to show some resistance on the downside with an bias towards some short covering / pullback. With the Markets expected to open flat, the levels of 5445 and 5490 shall act as resistance and the levels of 5420 and 5390 shall act as supports.

The RSI—Relative Strength Index on the Daily Charts is 35.2444 and it shows no failure swings. Also, the Markets have set a new 14-day low but RSI has not and this is BULLISH DIVERGENCE. The Daily MACD continues to trade below its signal line.

The Markets have added Open Interest again, that too significantly on the short side in last couple of session. Also, as mentioned above the lead indicators show some technical resistance on the down side thus leaving fair chance of a short covering or a technical pullback. All and all, the markets will have to move past the levels of 5440-5445 in order to be in the broad range of 5440-5610 again to avoid getting weaker. With F&O data and lead indicators showing some support coming in, it is continued be advised to avoid shorts and maintain cautiously positive outlook for the day.

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

Daily Market Trend Guide -- Wednesday, May 18, 2011

MARKET TREND FOR TODAY

Markets had an disappointing session on moderate volumes as it remained in falling trajectory for the entire session to end the day with losses and in the process have formed a lower top and lower bottom on the Daily High Low Charts.

For today, we are likely to see the Markets take some breather from the weakness that we saw in the first two days of this week. For today, we can expect the Markets to open on a positive note and trade in positive at least in the initial hour and look for directions. For today, with the levels of 5475, 5520 are likely to act as resistance and the levels of 5420 and 5390 are likely to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 36.2174 and it does not show any failure swing. The NIFTY has given a new 14-day low but the RSI has not and this is BULLISH DIVERGENCE.

Further to the above reading, the markets have added big open interest with very clearly shows creation of big short positions again. Further to this, the Markets did breach an trend line support of 5440 intraday but has closed on that support. Thus if it opens on a positive note, it would be critically important for the Markets to sustain above this levels of 5440.

All and all, given the reading of bullish divergence, heavy creation of shorts and Markets at trend line support, the chances of markets stabilizing are high. It is strongly advised to avoid shorts and maintain cautiously positive outlook for the day.

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

Daily Market Trend Guide -- Monday, May 16, 2011

MARKET TREND FOR TODAY

The Markets pared half of its gains after a strong session in the last hour of the trade. Though it still ended with gains, it has formed a slightly higher top and a similar bottom on the Daily High Low Charts.

The markets reacted on Friday to the assembly elections, in quite surprisingly manner. The effect of the selloff that we witnessed in the last hour of the session is likely to linger today in the opening trade.

Thus, we may fairly expect the markets to open on a negative note and look for directions. Also, hike in petrol prices are likely to dampen the sentiment and more damage will be done with the possibility of the rise in diesel prices which is likely anytime.

The RSI—Relative Strength Index on the Daily Chart is 42.2726 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line. On the Weekly Charts, the RSI is 46.1422  and is neutral as it shows no negative divergence or failure swings. The Weekly MACD however has given a sell signal as it has closed below its signal line.

The most important thing is that the pattern support exists at 5470 levels. In even of negative / weak opening, the behavior of the Markets vis-à-vis the levels of 5470 would be critically important. Any weakness below this levels shall make markets weaker. Until then, the Markets shall remain in the range of 5610-5470 and thus the trajectory that it forms after negative opening would be important. Cautious approach is advised for today.

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