Daily Market Trend Guide -- Friday, November 27, 2015

MARKET REPORT                                                                            November 27, 2015

The Markets had a relatively stronger session yesterday as it maintained its opening gains, got somewhat stronger and ended the day with decent gains. The Markets saw a modestly positive opening and traded with capped gains in the morning trade. The first half of the session saw the Markets maintaining its morning gains. In the second half, more particularly in the late afternoon trade, the Markets saw some more strength coming in. It perked up further and kept making fresh intraday highs gradually. It went on to form the intraday high of 7897.10 in the last hour of the trade. The gains were maintained as volatility was nearly absent even on the day of expiry yesterday. Though the Markets came off a bit from its highs, it settled the day at 7883.80, posting a decent gain of 52.20 points or 0.67% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, NOVEMBER 27, 2015

Markets have seen a relatively better expiry today and the lead indicators suggest formation of positive base for the Markets going ahead. Today, though the Markets are expected to open on a quiet note, there are bright chances that the Markets continue to remain in a broad consolidation zone with a inherent positive bias. The lead indicators and the technical charts suggest limited downside and possibilities of the Markets trading in a congestion zone with undercurrent remaining buoyant.

For today, the levels of 7915 and 7970 are indicative resistance levels for today. The supports come in at 7830 and 7780 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.7896 and it has reached its highest value in last 14-days which is bullish. Also, RSI has set a fresh 14-day high whereas NIFTY has not done so yet. This is Bullish Divergence. The Daily MACD has reported a positive crossover and it is now bullish as it trades above its signal line. We had reported possibility of a positive crossover in our yesterday’s edition of Daily Market Trend Guide.

On the derivative front, the NIFTY December series have begun with net Open Interest addition of over 47.10 lakh shares or 33.49%. The NIFTY PCR stands at 0.78.

Coming to pattern analysis, the Markets have continued to remain in a broad congestion zone that it has been trading in previous fortnight. Having said this, as mentioned often in our previous editions, the Markets have attempted to form a base and have vigorously attempted to find a bottom for itself. Though it has done this, it is yet to confirm its reversal on the Charts. Until the Markets confirm its reversal, it remains theoretically vulnerable to selloffs from higher levels. However, the technical charts, the lead indicators and the F&O data point towards undercurrent remaining buoyant.

Overall, the Markets shall open flat and trade in a range in the initial trade. However, there are chances that the Markets form a base and attempts further upside. However, until a reversal is confirmed, it will remain vulnerable to volatile movements from higher levels. It is advised to continue to remain stock specific and protect profits at higher levels while maintaining positive caution on the Markets.

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

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