The indices opened higher in the initial trade taking the positive global cues from the world markets. Nifty touched the levels of 5443 was tested by the market but in the later half it shed some weight on account of profit booking. This could be due to lack of conviction in the market which is still looking for a reason to go to the next levels. The strength is present in the market and at every lower level buyers are coming for the rescue. This is a situation of buying on dips which could make higher top higher bottoms on the charts.
On the charts, technically the picture looks encouraging for the bulls. The short term moving average (20EMA) is trading with strength above the medium term moving average (50EMA). This suggests that the stock is in a medium term bull phase. We expect this trend to continue until the moving averages give a topping out pattern.
The ADX is growing strong after each trading session with the current value at 46.36 levels, indicating the presence of strong trend in the benchmark. As suggested in our newsletters, the trend is upward till the ADX tops out which would be an important indicator in itself. The +DI is continuing its journey upwards and –DI is treading towards lower levels, indicating that buyers are present at every lower levels and sellers are closing their positions with every down movement.
The MACD indicator is suggesting an important development on the charts. The MACD line has topped out whereas the Signal line is continuing with its journey. The crossover of these lines would provide a clue to trade in the direction of the favor. The MACD Histogram has also topped out which would give a sell signal on the condition of having a penetration in the negative domain.
TEAM SLT
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