MARKET REPORT December 10, 2014
Markets saw continued correction and declined for the third
session in a row to end the day with similar losses. The Markets saw a
relatively quiet opening as expected and traded flat around its previous close
levels in the morning trade. It entered into positive territory for a very
brief period as it formed its day’s high of 8444.50 only to return into
negative territory again. After trading with limited losses, the Markets saw
itself weakening further. It transformed itself into falling channel and
remained in negative trajectory for the rest of the entire session while making
fresh gradual lows. It went on to form the low point of the day at 8330.50 in
the final minutes of the trade. Virtually no attempt to recover was seen and it
finally settled the day at 8340.70, posting a net loss of 97.55 points or 1.16%
while continuing to form a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR
WEDNESDAY, DECEMBER 10, 2014
Technically speaking, the Markets continue to remain weak
and are likely to extend its losses in the following session as well. In line
with this, we can expect the Markets to open on a quiet to mildly negative
note. However, given the short position see, it is likely that we might witness
a temporary technical pullback in the Markets as well.
The levels of 8375 and 8410 will now act as immediate
resistance while supports exist at 8290 and 8230 levels.
The RSI—Relative Strength Index on the Daily Charts is
45.7605 and it has reached its lowest value in last 14-days which is bearish. However,
it does not show any Bearish Divergence. The Daily MACD remains bearish as it
trades below its signal line.
On the derivative front, NIFTY December futures have went on
to add another over 8.23 lakh shares or 3.86% in Open Interest. This signifies
that there has been significant addition of shorts as it reflects in addition of
Open Interest.
Taking a cue from pattern analysis, the Markets have
resisted to the upper rising trend line while failing it to breach it on the
upside. Following this failure to establish a fresh high the levels of 8626 now
becomes a intermediate top for the Markets. With the two days of decline as well, there is
absolutely no structural breach on the technical charts as the Markets
continues to trade above all of its moving averages.
Overall, in event of the correction continuing on the
downside, we might get to see sharp technical pullbacks as well due to existing
short positions. As mentioned, there is no structural breach on the Charts as
the Markets continue to trade above all of its moving averages. This just being
a healthy correction triggered weak technical indicators; it is advised to
avoid creating fresh shorts as well. While continuing to restrict purchases
stock specific approach 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
Consulting Technical Analyst,
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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