Market View – 31st May – SMI

Posted By : Kishore B.S

Hi Friends !!!

The markets closed on a negative note yesterday largely due to the negative sentiments spread across the Globe due to lower than expected Chinese Stimulus and also refusal of ECB to provide financial credit to some of the Spanish Banks.
To further quel fears the Re depreciated further for the 3rd straight session to 56.26 against Dollar which is its lowest closing in the last decade due to rising demand for Dollars amidst shifting investors sentiments toward safer haven in the form of US treasury bonds.
The charts as stated clearly has been indicating the failure of our indices to crossover the resistance zone of 5028-5036 during the start of this week and also the dip of the indices to 4946 during yesterdays session. With this closure the indices have broken down the small upper trend channel to take support at the 4946 levels of the Fibonacci.
Though the support has been held yet if the Re further weakens and global sentiments worsen a dip to 4860 the next support level and further to the 4800 strong support level cannot be ruled out.
Since the expiry is also slated to Expire tomorrow a dip further downside to the feared 4700 levels too seems likely if the 4780 mark is taken out. Though volatility could be the rooster yet it would be advisable to take light positions until a clear direction emerges, wherein a break down below 4940 levels could lead to 4870 levels and a breakout above the 4998 levels could see the rally progress to 5030 levels easily.

(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)

Cheers!!

Team SMI

www.stockmarketinstitute.org

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