Daily Market Trend Guide -- Wednesday, December 09, 2015

MARKET REPORT                                                                        December 09, 2015

Markets saw a parabolic fall in the last hour of the trade and this had the Markets ending in the red for the fifth consecutive day.  The Markets saw a modestly negative opening but this w as quite resilient to the global Markets. The Markets showed quite good amount of resilience in the morning while it formed its intraday high of 7771.25 while it briefly traded in the positive in the late morning trade. However, it reversed its trajectory soon after that to trade into negative once again. The Markets continued to trade with modest losses for the most part of the session. It was the last hour of the trade that once again did maximum damage. The Markets saw a near straight-line fall and went on to form the day’s low of 7685.45. It finally settled the day at 7701.70, posting a net loss of 63.70 points or 0.82% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, DECEMBER 09, 2015

The Markets have nearly tested its important pattern support of 7680 yesterday as evident from the Daily Charts. Today, a modestly lower opening is expected and this keeps the Markets at a very critical juncture. Today’s lower opening is likely to see the Markets opening below or very near to this important pattern support and it would be important for the Markets to protect the 7660-7680 levels by any means to avoid any serious weakness from creeping in.

For today, the levels of 7730 and 7765 will act as important resistance levels. The supports come in at 7680 and 7610 levels.

The RSI—Relative Strength Index on the Daily Chart is 33.8617 and it does not show any failure swing. The NIFTY has formed a fresh 14-period low but RSI has not yet and this is Bullish Divergence. The Daily MACD has reported a negative crossover and is now bearish as it trades below its signal line.

On the derivative front, the NIFTY December futures have shed 89,925 shares or 0.46% in Open Interest. The figure remains negligible and shows no major unwinding of positions on net basis. The NIFTY PCR stands at 0.78 as against 0.77.

Coming to pattern analysis, the Markets have finally tested its pattern supports of 7680 levels as yesterday’s low was very near to that level. As of today, this level stands intact and it comes in the form of triple bottom formed since last September. This remains a important pattern support and any breach is likely to see some more weakness creeping in to the Markets. It would be of paramount important for the Markets to hold on to these levels. Today’s expected negative opening is likely to cause the Markets open below or very near to this support level and the Markets will have  to maintain this level by any means to avoid any weakness.

Overall, the Markets continue to wear a bearish undertone as of now. However, in the same breadth, the Markets have not breached its important support levels as yet. It would be important to see that the Markets maintain those levels and in case of expected negative opening, it improves as we go ahead in the session. While remaining away from creating any major exposures, cautious outlook should be continued 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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