Daily Market Trend Guide -- Friday July 29, 2011

MARKET TREND FOR TODAY

The Markets yesterday opened below its 50-DMA on expected lines following weak global cues and even weaker technicals and never recovered during the day and ended yet another day with losses and in the process have formed a sharply lower top and bottom on the Daily High Low Charts.

Technicals continue to remain weak for the Markets. Adding to this woes, weak global cues can cause the Markets to open again on a weaker note today and look for directions.

Today, thus, expect the Markets to open on a weaker note and look for directions.

With the Markets expected to open on a weaker note, the levels of 5440 and 5390 are to act as supports on the lower side. The levels o 5480-5525 are expected to act as resistance on the upside.

The lead indicators continue to point towards continuing weakness. The RSI—Relative Strength Index on the Daily Charts is 43.8503 and it has lowest value in last 14-days which is BEARISH. However, it does not show any negative divergence.

The Daily MACD continues to remain bearish trading below its signal line.

On Candles, A Falling Window occurred. This usually applies continuation of a bearish trend. Two candles preceding the falling window were black which makes the pattern even more bearish.

The Markets have a minor pattern support around 5435 and it would be critically important to see if the Markets takes support around this level after weak opening. It is likely to take momentary support at this levels.

All and all, the key lies to see the Markets taking support or not around the mentioned levels post opening. With today’s negative opening, Markets would have pared over 250-point from intraday high since 26th. Thus, some volatility and intermittent pullbacks cannot be ruled out. However, overall view on the Markets remains bearish. Cautious, stock specific 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 -- Thursday, July 28, 2011

MARKET TREND FOR TODAY

The Markets saw weakness persisting weakness following RBI’s aggressive stand with the more than expected rake hikes, as the Markets continued to end the day with losses and in the process have formed sharply lower top and lower bottom on the Daily High Low Charts.

Today, expect a weak and negative opening in the Markets following weak global Markets and persisting technical weakness. Today, the Markets 50-DMA levels of 5518 would play a critical role in deciding the trend for the day.

Today, it would be critical to see that in case of weaker opening, the Markets opens below or above the levels of 5518 as in case of opening below this levels, this level may continue to act as resistance for the rest of the day. Below this, the support exists at 5475 levels.

The lead indication show that the weakness in Markets may continue to persist. The RSI—Relative Strength Index on the Daily Chart is 48.0029 and this is reached the lowest value in last 14-days which is BEARISH. Also, RSI has set a new 14-period low whereas NIFTY has not yet, and this is BEARISH DIVERGENCE.

The Daily MACD continues to remain bearish trading below its signal line.

Today is the expiry day of the  current derivative series and thus, we may see the session remain heavily dominated with roll over centric activities. This may keep the Markets little volatile.

Further to this, even with rollovers, both NIFTY and Stock Futures have shown net decrease in total Open Interest which supports weak technicals.

All and all, in even of Markets opening or breaching the levels of 5518 is likely to make the Market weaker and increases the probability of taking it to next indicative support at 5475. On the upside, it has resistance of its 100-DMA at 5581. Overall, range bound or weak trading day expected today. Continuation of stock specific approach with vigilant protection of profits 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, July 27, 2011

MARKET TREND FOR TODAY

The Markets took a rude shock yesterday following  RBI’s announcement of hiking Repo and Reverse Repo Rate by 50 bps against widely expected 25 bps as it came off over 120 points from its day’s high to ended the day with significant losses, forming a similar top and lower bottom on the Daily High Low Charts.

Today, the Markets will see a flat opening followed by a direction-less trade in the initial session. Though some minor pullbacks may be see, the trend would critically and largely depend upon the intraday trajectory it forms.

With the flat opening expected in the Markets the levels of 5600 and 5640 shall act as resistance and the levels of  5712 and 5480 are likely to act as supports. The Markets have closed a notch below its 100-DMA levels of 5581.29.

The RSI—Relative Strength Index on the Daily Chart is 50.0596 and is neutral as it shows no negative divergence or a failure swing.

The Daily MACD has again turned bearish reporting negative crossover making it trade below its signal  line.

On the Candles, a big black candle has occurred. With the current formation, it has lent credibility to the resistance area from where the Markets reacted.

The Markets have reacted twice to its 200-DMA levels, currently at 5712 and this has now become a temporary top. The fresh up move shall occur only after the Markets moves past these levels. Further to this, the Markets have closed a notch below its 100-DMA. Any breach is likely to take it to its 50-DMA of 5712, with another support coming in at 5480. The NIFTY and Stock Futures have shown net decrease from total open interest which takes the bias towards temporary weakness.

Even if some technical pullback is seen, it is expected to be limited in range with some amount of volatility ingrained in it.  It is strongly advised to continue with very cautious outlook and stock specific approach 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 -- Tuesday, July 26, 2011

MARKET TREND FOR TODAY

After a lackluster trade for more than half of the session, the Markets suddenly saw a spurt, taking it higher and ended the day with smart gains, an in the process forming a higher top and higher bottom on the Daily High Low Charts.

The Markets are in the process of attempting a trend reversal and today is going to face a very critical test today.

Today, expect the Markets to open on a moderately positive note and look for direction. The intraday trajectory that it forms  and the volumes would play a critically important role in deciding the sustainability of the process of reversal attempt.

Today, with the Markets expected to open on a flat to mildly positive note, the levels of 5700 and 5720 are expected to act as resistance and the levels of 5650 and 5610 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 59.0872 and is neutral as it shows no negative divergence or failure swings.

The Daily MACD has given a bullish signal as it has crossed over its signal line and now trades above its signal line.

The Markets have attempted to move out of the big falling trend line which forms a broad falling channel drawn from its lifetime highs of 6335 an joining the falling tops thereafter. Though the Markets have attempted to reverse the trend by move out of this channel, it still faces a resistance in form of 200-DMA 5715 and also in form a Double Top at  5740. The Markets will have to move past this two levels to successfully reverse the trend and in event of moving past these levels, we may see some more sustainable upside in the Markets. However, in the process of doing so, it is expected to act volatile, showing intermittent spurts and also trading in a range. The stock specific activities will be seen. Also, this being expiry  week, the sessions will also remain dominated with rollover activities. However, until this levels are breached, ultra cautious stock specific 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 -- Monday, July 25, 2011

MARKET TREND FOR TODAY

The Markets on Friday, saw a huge spate of short covering as it ended the day with decent gains, forming a higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a mildly negative note and look for directions. Along with the intraday trajectory that it forms, the volumes too are expected to play critical part in deciding trend for today.

With the Markets expected to open on a mildly negative note, it is most likely to it trades in a range remaining intermittently volatile as it continues to remain in overall falling channel.

For today with negative opening expected, the levels of 5660 and 5675 are expected to act as resistance and the levels of 5580 and 5560 are expected to come in as supports.

The RSI—Relative Strength Index on the Daily Charts is 55.85 and is neutral as it shows no negative divergence or failure swings. The MACD continues to remain bearish as it trades below its signal line.

On the Weekly charts, the RSI is 51.3412 and it remains neutral without showing any negative divergence or failure swing. The Weekly MACD trades above its signal line.

As per the Chart Pattern analysis, the Markets still continues to trade below its falling channel / trend line drawn from its life time highs of 6335,  and joining the tops thereafter, both on the Daily as well as weekly charts.. Also, as per the F&O figures, the NIFTY futures have shed total open interest showing more of a short covering rather than fresh buying. Thus, as mentioned in previous session of our Daily Market Trend Guide, the Markets will need a trend reversal for a sustainable up move and this is expected to occur only after the Markets moves past and sustains above the levels of 5670-5720. The Markets may remain volatile and in a range until then. All and all, until this happens, it is advised to continue to remain stock specific and continue to vigilantly protect profits. A stock specific approach with cautious outlook is advised for today. 

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