Daily Market Trend Guide -- Friday, January 01, 2016

MARKET REPORT                                                                                    January 01, 2016

What had remained a lackluster session for the first half on expected lines, turned out to be the one with decent gains as the Market ended the series as well as the year on a positive note. The Markets saw a quiet opening and after trading positive for a brief time slipped into the negative while it formed a day’s low of  7891.15. Though the Markets recovered quickly to trade back into positive, it traded with very limited gains. The most part of the first half of the session was spent in a sideways trajectory while it headed nowhere. The late afternoon trade saw some strength coming in as it attempted to fortify its modest gains. The Markets saw itself moving past its morning highs. After deliberating for a brief time, it became even stronger while it formed its day’s high at 7955.55. It came off a bit from those levels and finally settled the day at 7946.35, posting a decent gain of 50.10 points or 0.63% while forming a higher top but similar bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JANUARY 01, 2016

The Markets are expected to ring in to the New Year on a little subdued note. After ending the day on the high point of the day yesterday, we are expected to see a modestly negative opening today and the Markets are expected to remain little subdued and consolidate in a range. The volumes too are expected to be little lower and the overall range that we can expect would be broad 7900-7980 levels.

For today, the levels of 7960 and 8000 are expected to act as immediate resistance levels for the Markets. The supports would come in at 7910 and 7880 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.6124 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 stays bullish as it trades above its signal line.

On the derivative side, the rollovers remained decent and quite in line with its past3-month average. The NIFTY January series added over 46.49 lakh shares or 32.45% of Open Interest. There has been net addition in the OI following rollovers indicating long bias in the Markets.

Coming to pattern analysis, the Markets have been oscillating in a broad 100-odd point range of 7840-7940 and while doing this, it has been crisscrossing its 50-DMA in the process. In event of any down side, the Markets have supports at 7880. Any up move will see the Markets testing its next very important pattern support of 100-DMA which is 7987 and all important pattern resistance of 8000. Going by the overall structure of the Charts, Markets will fully confirm their bottom only after it moves past these levels. Until this happens, we will continue to see the Markets consolidating and oscillating in a broad given range.

Overall, there has been some air of caution in the Markets but the undertone continues to have a bullish bias. However, fresh and new sustainable up moves shall come only beyond 8000-levels and until this happens, we continue to reiterate to continue to adopt very selective approach in the Markets. While continuing to vigilantly protect profits at higher levels, continuance of cautious outlook 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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