MARKET REPORT December
09, 2014
Markets clearly saw some correction from higher levels today
much on expected lines and ended the day with losses. Taking a cue from weak
technical indicators, the Markets opened on a mildly negative note. After such
opening, it went briefly in the green while it formed the day’s high of
8546.35. The Markets traded in green for a very brief period in the morning
trade and then immediately returned back to the negative territory. It
continued trade with modest losses until afternoon trade wherein the trajectory
remained more or less sideways. It was in the second half of the session when
the Markets saw some more pressure as it made its way lower. It went on to form
its day’s low of 8432.25 towards the end of the session. No much recovery was
seen and the Markets finally ended the day at 8438.25, posting a net loss of
100.05 points or 1.17% while forming a lower top and lower bottom on the Daily
Bar Charts.
MARKET TREND FOR
TUESDAY, DECEMBER 09, 2014
Speaking purely on technical grounds, the Markets still has
room to continue its drift on the downside. We can fairly expect the Markets to
open on a quiet note and trade with downward bias. While continuing to trade
below its upper rising trend line, the Markets had been trading sideways and
this downside is all likely to infuse short term weakness in the Markets.
On the upside, the levels of 8540 and 8595 would act as
immediate resistance for the Markets. The immediate supports would exist at
8350 and 8310 levels.
The RSI—Relative Strength Index on the Daily Chart is
53.9182 and it has reached its lowest value in last 14-days which is bearish.
Further, the RSI has set a fresh 14-day low whereas the NIFTY has not yet and
this is Bearish Divergence. The Daily MACD continues to trade below its signal
line and is therefore bearish.
On the derivative front, the NIFTY December futures have
added over 11.66 lakh shares or 5.79% in Open Interest. NIFTY had added OI in
the previous session as well. This very clearly suggests addition of good
amount of short positions in the Markets. These shorts are also likely to
prevent any serious downside as they themselves tend to lend support going
ahead.
Looking at the pattern analysis, the Markets failed to clear
the upward rising trend line to give a clear breakout on the upside. It moved
sideways and then formed a distinct lower top and lower bottom. Usually
speaking on technical grounds, this can induce further short term weakness but
at the same time, looking at the shorts that are observed in the system, more
of range bound consolidation rather than sharp correction can be expected.
Overall, the Markets are likely to remain in corrective mode
but during this phase, more amount of range bound consolidation is likely to be
seen rather than straight downside. Given the shorts in the system that are
seen being created during previous couple of sessions, they are likely to lend
support at lower levels and might prevent deeper downside. However, it is
advised to stick to defensives and non-index components while making fresh
purchases. Continuance of caution in the Markets is advised.
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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