Posted By : Kishore B.S
Hi Friends !!!!!
The markets opened with a positive GAP yesterday above the 5000 mark and near the minor resistance level of 5036, however the Indices flickered during the initial hours of the trading session to cross the 5036 hurdle and drifted down to the 5007 levels.
The start of the European markets coupled with cut by Chinese Bank on the deposit and lending rates for the first time in the last 3 years provided the ammunition to the global markets to surge ahead that some positive Economic Reforms would start in the 2nd Largest Economy of the world.
Our markets too were not far behind and rallied up to close near the 5050 levels which was has been fabulous given the sentiments prevalent during end of last week where all the analysts and investors were largely bearish with the viewpoint of the Indices dipping to the 4500 levels.
The charts below indicate that after 3 consecutive bullish days behind us the Indices are now poised to face resistance near the 5080 mark and support emerges near the 4970 levels, which is quite huge. Given the velocity of the positive uptrend coupled with the fact of the weekend today, and no positive announcements by the FED or ECB of the much expected QE some profit booking or correction to the support level of 4970 cannot be ruled out.
However if the Indices manage to cross the resistance level of 5082 then the upward momentum would continue its run to the next resistance level of 5200 easily in the next few sessions. On the bleaker side a breakdown below the 4960 mark could result in further selling pressure to drag the Indices back to the 4880-4800 levels soon which is the strong support zone.
It would be ideal to trade with the above mentioned facts for today.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)