Daily Market Trend Guide -- Thursday, December 24, 2015

MARKET REPORT                                                                                    December 24, 2015

Markets had a very healthy and stable session yesterday as it opened positive, maintained its gains and went on to end the day with decent gains. The Markets saw positive start as expected and after trading with stable gains, inched up further to post gradual highs. The Markets spent nearly entire session in a sideways trajectory where it maintained its gains in a steadfast manner. In the second half, it got some more strength and formed its intraday high of 7871.45. These levels too were maintained and the Markets therefore successfully defended its critical levels of 7820 for the entire day. While maintaining these gains, the Markets finally ended the day at 7865.95, posting a net gain of 79.85 points or 1.03% while forming higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, DECEMBER 24, 2015

The Markets have advanced yesterday ending near the high point of the day and speaking purely on technical grounds, we can expect a modestly positive opening once again. Markets are expected to open on a modestly positive note and is likely to advance in the initial trade. The most logical target of this continuance of the up move can be the 50-DMA levels, i.e.  7933 levels. However, it remains important for the Markets to defend 7820 levels in event 

of any consolidation.

For today, the levels of 7900 and 7935 will act as immediate resistance for the Markets. The supports come in at 7840 and 7820 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.2270 and it does no tshow any bullish or bearish divergences. However, the RSI has formed its fresh 14-day high and this is bullish. The Daily MACD stays bullish as it trades above its signal line.

On the derivative front, the NIFTY December futures have shed over 13.14 lakh shares or 7.13% in Open Interest. This is a very clear indication of heavy short covering taking place yesterday. The NIFTY PCR stands at 0.83 as against 0.80.

Coming to pattern analysis, as detailed in our yesterday’s edition, the Markets have attempted to confirm the bottom / reversal. It pulled back some 300-odd points from its important pattern support and a 52-week lows and thereafter it oscillated and consolidated in 100-odd points range and attempted to move up once again forming a higher bottom. If it continues to do so and succesfully forms and confirms a immediate bottom, the next logical targets / resistance would be the 7930-7940 range for the  Markets.

All and all, the Markets are likely to open positive, and trade with modest gains in the initial trade. It would be important for the Markets to sustain and continue to buuild up on the expected modest opening that it might get. In event of any consolidation / minor weakness, the 7820 levels would be important to watch out for. Cautiously positive 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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Wednesday, December 23, 2015

MARKET REPORT                                                                     December 23, 2015

What seemed to be a stable session turned out to be a disappointing one as the Markets gave up in the second half of the session to end the day with modest losses. The Markets saw a quiet but slightly negative opening and spent the morning session trading with minor losses in a capped and narrow range. The Markets maintained itself above the 7800 mark and in the first half of the session, traded in upward rising trajectory trying to recovery opening losses. The Markets kept advancing gradually but overall remained in a narrow range. At one point in the afternoon, the Markets saw itself trading in positive trajectory while forming the day’s high of 7846.30. It was once gain the final hour and half of the trade which did the most of the undoing. The Markets saw a sharp selling pressure from these levels and pared ground rapidly. It went on to dip once again in the negative trajectory and formed the day’s low at 7776.85. It finally settled the day at 7786.10, posting a net loss of 48.35 points or 0.62% while forming a slightly higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, DECEMBER 23, 2015

Markets are poised at a very critical juncture as it has been resisting to a rising trend line which also acts as a important pattern resistance. Today, we can expect a positive opening for the Markets and it would be of paramount importance that the Markets builds up further post positive opening in order to confirm the reversal / formation of a bottom. The trend line has been rising and so is the resistance level associated with this. The levels of 7820 would be important to watch out for in this context.

For today, the levels of 7820 and 7870 will act as important resistance levels for the Markets. The supports come in at 7750 and 7720 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.1722 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is bullish as it trades above its signal line.

On the derivative front, the NIFTY December futures have shed over 1.08 lakh shares or 0.59% in Open Interest. This figure, once again remains relatively negligible. The NIFTY PCR stands at 0.80 as against 0.81.

Coming to pattern analysis, as mentioned often, the Markets have been attempting to confirm a bottom / reversal after it took support at its 52-week lows and a double bottom. Having said this, it pulled back some 300-odd points from there. It has been oscillating in a capped 100-odd points range and have been resisting to its important pattern resistance level of 7800. It is important to note that this pattern resistance is a rising trend line and therefore with each passing day, the level required to move past this resistance also rises. This makes it difficult for the Markets to give a decisive up move. Today, this important level stands at 7820.

All and all, as mentioned above, the levels of 7820 would be important and it would be critically important for the Markets to move past this level. Until it does so, the Markets will continue to oscillate and will remain of any devoid of any decisive up move. No clear directional bias or confirmation of bottom will take place until this happens. While remaining moderate on overall exposures, selective and cautiously positive 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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com