Daily Market Trend Guide -- Tuesday, December 29, 2015

MARKET REPORT                                                                                December 29, 2015

Markets had a relatively stable session as it went on to advance to its 50-DMA and while resisting there, ended the day with decent gains. The Markets saw a quiet opening and soon after this, it saw an up move which saw the Markets trading with some decent 30-odd points gains. The most part of the session thereafter was seen spent in a 20-odd points range as the Markets maintained its gains and traded in sideways trajectory. It was the late second half of the session which once again saw a sharp spurt in the Markets. The Markets went on to move past moderately its 50-DMA as it formed its intraday high of 7937.20. It came off a bit from those highs and finally settled the day a notch below its 50-DMA at 7925.15, posting a decent gain of 64.10 points or 0.82% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, DECEMBER 29, 2015

The Markets have expectedly advanced and touched its 50-DMA on expected lines. Today as well, we can fairly expect a modestly positive opening and expect the Markets to trade positive in the initial trade. However, there are also chances that the Markets may now see some consolidation setting in as it approaches yet another important pattern support which also coincides with its 100-DMA. However, there is some distance to go and some amount of consolidation cannot be ruled out.

For today, the levels of 7945 and 8000 will act as immediate resistance levels for the Markets. The supports come in at 7905 and 7840 levels.

The RSI—Relative Strength Index on the Daily Chart is 56.7850 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it trades above it signal line.

On the derivative front, the NIFTY December futures have shed over 13.02 lakh shares or 7.94% in Open Interest and the January Series have added over 29.73 lakh shares or 72.36% in Open Interest. The NIFTY PCR stands at 0.86 as against 0.83.

If we have a look at pattern analysis, the Markets have predictably advanced to its immediate logical resistance levels of 50-DMA, which is 7925.15 today. It is important to note that though the Markets went above this on intraday basis yesterday, it has closed just a notch below this and therefore, this resistance, at Close levels, continues to remain valid even today. Therefore, even with a positive opening above this level, the Close levels should be watched out for and it would be necessary for the Markets to move past this level at Close. Going further from here, in a scenario where the Markets moves past this level at Close, it will see itself testing its all important pattern resistance of 8000-level which also happens to be its 100-DMA.

The reason of some consolidation setting is that there is one minor weakness seen in the rally of over 350-odd points that we have seen over past couple of sessions. The OBL-On Balance Volume indicator has not been rising since the NIFTY levels of 7750 and this makes the rest of the pullback little weaker. However, we may continue to adopt a highly stock specific approach as sectoral out performance will continue. Cautious optimism is advised for today.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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