MARKET REPORT December
15, 2014
Markets continued with its correction on Friday as well and
went on to test its important support before ending the day with losses. The
Markets saw positive opening and it traded positive in the morning trade. The
early part of the session saw the Markets trading positive with capped gains as
it remained sideways while it also formed its intraday high of 8321.90. The
late morning trade saw the Markets drifting slowly into the negative territory.
Even with the Markets trading negative since late morning session, it remained more
or less range bound with very limited losses. The second half of the trade saw
some selling pressure getting intensified as the Markets resumed its fresh
downside move. It saw steady paring of gains in the second half of the session.
The Markets went on to form the day’s low of 8216.30. With no major recovery
being seen, it finally ended the day at 8224.10, posting a net loss of 68.80
points or 0.83% while forming a lower top and lower bottom on the Daily Bar
Charts.
MARKET TREND FOR MONDAY, DECEMBER 15, 2014
On Friday, the Markets have went on to test its important
support levels of 8216 in form of its 50-DMA. Today, the Markets would open
reacting to weaker than expected IIP data and also the CPI inflation data which
came out little better. However, we can once again expect a negative opening in
the Markets. However, it is likely that we see some improvement with the levels
of 50-DMA holding out as support as shorts have also continued to get piled up.
The levels of 8250 and 8295 are immediate resistance levels
for the Markets. The supports exists at 8216 (at Close levels) and further down
at 8150.
The RSI—Relative Strength Index on the Daily Chart is
39.9646 and it has reached its lowest value in last 14-days which is bearish.
However, it does not show any bullish or bearish divergence. The Daily MACD
continues to remain bearish trading below its signal line. On the Weekly
Charts, the Weekly RSI is 59.4184 and it has moved below from its topping
formation. It does not show any bullish or bearish divergence or failure
swings. The Weekly MACD has reported a negative crossover as it now trades
below its signal line and its bearish.
On the derivative front, the NIFTY December futures have
went on to add another 10.02 lakh shares or 4.53% in Open Interest. This goes
on to indicate heavy piling of short positions in the system.
Taking a cue from pattern analysis, on the Weekly and Daily
Charts, the Markets have retraced significantly after resisting to the rising
trend line of the broadening formation. This formation is more clearly visible
on the Weekly Charts. Having said this, it becomes important to point out that
there has been no significant breach on the Charts as the Markets continue to
trade above all of its DMAs.
Overall, even if we see a negative opening today, there are
chances that the Markets improve as we go ahead in the session or at least
shows some resilience. In event of closing below the 50-DMA levels, it is
likely that it does not break it filter even after that. Given this scenario,
it is advised that fresh positions should be restricted to selective stocks.
Also, shorts should be avoided as no major breakdown in Markets is expected due
the short positions that are being seen built up. Overall, cautious optimism is
advised for the day.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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