Daily Market Trend Guide -- Thursday, December 08, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY                                                                             December 8, 2011

The Markets had an little disappointing session yesterday as it spent most of its day in a tight 30-odd point range after opening but pared almost all of its gains in the last 45-minutes of the trade to end the day with moderate gains. The Markets, however, have more or less traded in the manner analysed in our yesterday’s edition. The Markets, after opening little lower, took support near its 50-DMA on expected lines and have so far maintained above that. In the process, the Markets have formed a higher top and higher bottom on the Daily High Low Charts  with average volumes of 1.26 lakh Crores.

Again, as evident from the above charts, the Markets have continued to remain in a range and today’s session and its analysis thereof, would be more or less same as that of yesterday as the Markets are again expected to consolidate, but with a upward bias.

For today, expect the Markets to open on a moderately lower to flat note. The cautious mood ahead of very critical EU Summit and the technical reason of little consolidation after the last week’s gain would weigh on the Markets and these two factors are likely to keen the Markets in a range and consolidation. For today, the levels of 5090 and 5122 are likely to act as resistance and the levels of 5015 and 4980 are likely to act as supports. The RSI—Relative Strength Index on the Daily Chart is 55.2702 and it has reached its highest value in last 14-days which is Bullish. It does not show any negative / bearish divergence. The Daily MACD continues to remain Bullish as it trades above its signal line. On the Candles, Three white candles has occurred. Though these are not big enough to create three while soldiers, the steady upward pattern is bullish.

Further to this, NIFTY Futures and most of its components have added moderate open interest showing creation of long positions and also good amount of shorts exists in the system.

Reading the above technical factors, one had to also take into account the upcoming EU summit and some major announcements from there which has held the world markets on toes. Some amount of caution is likely to weigh on the Markets towards close  or during the day which may keep it range bound during the day and bit volatile. European markets saw wild movements yesterday and US Markets recovered considerably from their day’s low.

All and all, cautious sessions ahead. The Markets are in a immediate range of 4980-5125 and we may see range bound movements with lack of conviction and full of caution ahead of major announcements. Shorts in the Markets should be avoided as per F&O figures and at the same time, profits should be protected at higher levels. Overall, cautious optimism is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com