MARKET REPORT December
18, 2014
Markets ended the day in the red for the fifth session in a
row but also survived a scare in the early morning trade is come off quite a
bit from its lows before ending with modest losses. The Markets saw a flat and
quite opening and after opening saw a sharp selling pressure in the morning
trade. The Markets went down to make the day’s low of 7961.35 in the late
morning trade. However, the rest of the session saw a technical rebound as the
Markets gradually recovered all of its gains. It recovered over 110-odd points from
the lows of the day and also went to trade into the green for a brief time
while it formed the intraday high of 8082. It came off a bit again but this
time traded in a capped range without posting much losses and finally settled the
day at 8029.80, posting a net loss of 37.80 points or 0.47% while continuing to
form a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY, DECEMBER 18, 2014
The session remains a very crucial one as the Markets have
closed a notch below its 100-DMA. However, we can expect a modestly positive
opening in the Markets as they remain oversold and a technical rebound remains
imminent. The levels of 8059 remains crucial and it would be important for the
Markets to move past and sustain above 8060 levels in order to avoid any
further weakness.
The levels of 8060 and 8130 would act as immediate
resistance for the Markets. The supports would come in at 7960 and 7910 levels.
The RSI—Relative Strength Index on the Daily Chart is
28.1640 and it has reached its lowest value in last 14-days which is bearish.
However, it does not show any bullish or bearish divergence and it now trades
in “oversold” area. The Daily MACD remains bearish as it continues to trade
above its signal line.
On the derivative front, NIFTY December futures have added
modest 12,400 shares or nominal 0.05% in Open Interest. There have been no
major unwinding or shorts were seen in the system.
Taking a look at pattern analysis, the Markets have lost
nearly 650-odd points of NIFTY in last couple of sessions while resisting to a
upper rising trend line of a broadening formation. During this phase, the
Markets have now formed a intermediate top at 8623 levels. However, it has seen
over 66% retracement and forms a good case for a technical rebound. The
constant addition of short positions and the “overbought” nature of the Markets
will aid to this.
Overall, the Markets are due for a technical rebound at any
time. It has attempted one while recovering from the lows and is likely to
continue its effort as well. It can mildly resist to the 100-DMA levels of
8059-60 but it is likely that it would move past this level. It is critically
important for the Markets to move past this level in order to successfully
attempt an up move. While very small amounts of selective purchases may be
made, overall, positive caution is advised while maintaining liquidity 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
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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