MARKET TREND FOR FRIDAY, DECEMBER 09, 2016
Much on analyzed lines over past couple of days, the NIFTY
finally confirmed its immediate bottom while it saw a sustained all-round rally
after consolidating for coupe of days. The NIFTY opened positive, became
stronger as we went ahead in the session and ended near the high point of the
day while moving past its 200-DMA at Close levels. Speaking purely on technical
ground, we may see a stable opening once again tomorrow and expect the NIFTY to
continue with its up move at least in the initial trade. Any consolidation will
now see 200-DMA as its support and what we have seen is the near term
confirmation of recent bottoms. However, we need to closely watch US Bond
Yields which refuse to come off and have been steadfastly maintaining its
gains. This may continue to remain a reason which may continue to cause the
Markets to consolidate at higher levels.
For today, 8275 and 8310 will act as immediate resistance
levels while supports remain at 8190 and 9170 levels.
The RSI—Relative Strength Index on the Daily Chart is
50.5007 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 continues to trade above its signal line.
On the derivative front, the NIFTY December futures have
added a massive 10.32 lakh shares or 6.52% in Open Interest. This shows
conviction in the up move.
While having a look at pattern analysis, the NIFTY formed
its immediate bottom at 7928 and then had a pullback rally. It came off after
resisting to its 200-DMA and had been consolidating since then. It was
necessary for the NIFTY to form a higher bottom and resume its up move. With
the decent rise that we saw in the previous session, the NIFTY has resumed its
up move while forming a higher bottom. In the process, it has moved past its
200-DMA as well which stands at 8190 today. In event of any consolidation, this
level is now expected to act as support at close levels.
All and all, the technical structure of the Charts supported
by lead indicators and F&O data clearly suggest that upward momentum in the
Markets would continue. Only factors that would be of some concern are the US
Bond Yields are still strong and showing upward bias and the US Dollar Index
which is consolidating heavily with a upward bias. These two factors may cause
the NIFTY to consolidate at higher levels once again but inherent strength
remains intact and we continue to maintain a positive outlook on the Markets.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA
http://milan-vaishnav.blogspot.com
+91-98250-16331
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