MARKET REPORT December
10, 2015
The Markets continued to disappoint and
ended with losses for the sixth day in a row as it widened its losses after a
negative opening. The Markets opened on a relatively resilient note and
attempted to defend its pattern support of 7680 levels in the initial trade
while it formed its day’s high of 7702.85. However, weakness crept in as the
session progressed and by late afternoon trade, the Markets breached its
support of 7680. It continued in sideways trajectory in the afternoon trade and
was not successful I in moving past the pattern resistance levels. In the
second half, more so in the last hour of the trade, the losses widened as the
Markets lost ground rapidly. It went on to form the day’s low of 7606.90. It finally
settled the day at 7612.50, posting a net loss of 89.20 points or 1.16% while
forming a sharply lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY, DECEMBER
10, 2015
Markets have come off nearly 320-odd points
in last six sessions. Today as well, though we can expect a modestly positive
but quiet opening, the upsides will remain capped to the extent of pattern
resistance that he Markets have broken. Though there are faint chances of technical
pullback the upsides will remain limited until the Markets confirm any signs of
bottom formation. Slightest of the weakness will see the Markets testing its
52-week lows and another pattern support of 7545 levels.
For today, the levels of 7645 and 7680 will
remain resistance levels for the Markets. The supports come in at 7580 and 7545
levels.
The RSI—Relative Strength Index on the
Daily Chart is 29.4823 and it now trades in oversold territory. Though it does
not show any bullish or bearish divergence, it has reached its lowest value in
last 14-days which is bearish. The Daily MACD remains bearish as it trades
below its signal line.
On the derivative front, the NIFTY December
futures have added over 2.93 lakh shares or 1.52% in Open Interest. This
signifies some creation of short positions as well. The NIFTY PCR stands
unchanged at 0.78.
Coming to pattern analysis, the Markets
have breached one of its important triple bottom pattern supports of 7680
levels. This level, since now breached is likely to act as resistance in event
of any technical pullback. The Markets may see mild technical pullback but the
overall fabric has turned bearish and such pullbacks are likely to remain
capped at 7680-7700 levels. Any weakness will see the Markets testing its
52-week lows of 7545 levels, which is also expected to act as support. However,
given the oversold nature of the Markets, some technical pullbacks cannot be
ruled out, even if it remains limited in nature.
Overall, today we can expect a quiet
opening in the Markets. Some pullback may be seen later in the day but at the
same time, it will continue to remain vulnerable to further selloffs from
higher levels. However, any technical pullbacks / up moves should be utilized
to book and protect swing profits but overall, it is advised to continue to
remain very limited on exposures and avoid major purchases until the Markets
shows some sign of bottom formation.
Milan
Vaishnav,
Consulting Technical Analyst
Af. Member: Market
Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts,
(ATMA), INDIA
+91-98250-16331
