Friday, December 30, 2016

Daily Market Trend Guide -- Friday, December 30, 2016

MARKET TREND FOR FRIDAY, DECEMBER 30, 2016
Very much on expected line, the NIFTY resumed its up move after a day’s break and ended the day with decent gains of 68.75 points or 0.86%. We had mentioned in our previous edition that NIFTY not correcting at Close levels even after a gain of 124-points in the previous session is a sign of inherent strength. NIFTY continues to display buoyancy and today we expect as stable and positive start to the Markets and the NIFTY is likely to continue with its gains at least in the initial trade. In the given circumstance, the logical targets for the NIFTY can be its 200-DMA which stands at 8258.

For today, the levels of 8165 and 8220 will act as immediate resistance levels for the Markets. The supports come in at 8065 and 8020 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.2825 and it continues to remain neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD, as we had expected in our previous edition has reported a positive crossover and it is now bullish while trading above its signal line. On Candles, an engulfing bullish line has occurred and given the structure of the Chart, it is very much likely that it will fuel the up move in the next session. However, this needs confirmation.

On the derivative front, the NIFTY January series has added over 33.98 lakh shares or 26.66% in Open Interest resulting into net addition of Open Interest over December futures.

Coming to pattern analysis, two things stands established. First, the levels of 7900-7920 have continued to hold as immediate short term support. Secondly, this level has also seen a important pattern formation of a Double Bottom and this is likely to continue to lend support to the Markets in the immediate short term. However, it is important to note that the bottoms have been formed but the reversal is yet to be confirmed. Confirmation will occur once the NIFTY moves past 200-DMA and sustains above that.

Overall, the buoyancy is likely to continue. Though some intermittent profit taking bouts cannot be ruled out, at no point the Charts warrants creation of fresh short exposures. Dips should be continued to be utilized to make select purchases. Sector rotation has once again become evident and IT and FMCT and select energy and Midcaps are likely to remain in focus. Overall, we continue to have positive outlook on the Markets for today.

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member: Market Technicians Association, (MTA), USA 
Canadian Society of Technical Analysts, (CSTA), CANADA



+91-98250-16331 

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