Wednesday, December 3, 2014

Daily Market Trend Guide -- Thursday, December 04, 2014

MARKET REPORT                                                                                December 04, 2014
The Markets continued to see range bound consolidation as it ended the day with minor gains after moving in either direction. The Markets saw a flat opening and it traded in a very narrow and capped range in the morning session. After trading in sideways trajectory in the morning, the Markets saw some up move and saw itself touching the day’s high of 8546.95 in the afternoon trade. The Markets saw some amount of volatility creeping in once again as the Markets pared all of its recovery and traded flat. It saw some up move again in the late afternoon trade but did not see any runaway rise as well. Markets saw itself continuing to trade in a sideways trajectory in a much capped range and it finally ended the day at 8537.65, posting minor gains of 12.95 points or 0.15% while forming a slightly lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, DECEMBER 04, 2014

The Markets are not completely out of the woods as yet and they continue to trade below the pattern resistance levels on the Daily Charts. We are expected to see modestly negative opening once again and there are technical chances of the Markets seeing some weakness for the immediate short term. In case of up moves, the levels of 8550-8575 zone would continue to pose resistance to the Markets.

The levels of 8550 and 8575 would act as immediate resistance for the Markets. Levels of 8430 and 8375 would continue to act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 66.6763 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD is bearish as it now trades below its signal line.

On the derivative front, NIFTY December futures have shed further 8.78 lakh shares or 4.11% in open interest. This continue to show that there has been consistent unwinding of long positions in the Markets.

Taking a cue from pattern analysis, the Markets continue to trade below its pattern resistance zone of 8550-8575 levels. So long as the Markets trade below these levels there are clear chances of it remaining weak. For a fresh up move to occur, the Markets will have to move past these levels with conviction and volumes. Until this happen, we continue to live with possibility of some short term correction.

Overall, speaking purely on technical ground, the Markets are prone to some short term correction. Pattern analysis show clear possibility of this and the F&O data second this reading. Given this technical condition of the Markets, it is strongly recommended to refrain from aggressive purchases. While remaining exposed to only select defensive stocks, liquidity should be maintained. Tight vigil over existing profits along with cautious outlook is advised for the day.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in
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