Daily Market Trend Guide -- Monday, November 30, 2015

MARKET REPORT                                                                               November 30, 2015

Markets witnessed a volatile session on Friday though it ended the day with modest gains. The Markets saw a stable opening on expected lines but after a range bound and capped trade in the morning, the Markets formed its intraday low of 7879.45. However, the Markets managed to crawl back to its opening levels and maintained those gains in the morning trade. It was the mid session trade that saw the Markets coming off rapidly from these levels. At one point, the Markets had pared nearly all of its gains. However, the last hour and trade saw the Markets scaling its earlier gains as well. It further went on to form the day’s high of 7959.30 in the last hour of the trade. It came off slightly from those levels and settled the day at 7942.70, posting a modest gain of 58.90 points or 0.75% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, NOVEMBER 30, 2015

Markets have ended near their high point on Friday and speaking purely on technical terms, once can expect the Markets to open positive and continue with their up move. However, today, we can expect the Markets to open on a quiet note and look for directions. Markets will certainly wear a cautious outlook ahead of GDP numbers coming out today evening post market hours and also to the RBI Credit Policy review tomorrow. However, RBI credit policy is expected to remain a non-event.

For today, the levels of 7960 and 7995 will act as important resistance levels whereas the supports would come in at 7870 and 7845 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.4584 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has formed a fresh 14-period high whereas NIFTY has not yet and this is Bullish Divergence. The Daily MACD remains bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 45.0910 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Weekly MACD remains bearish as it still trades below its signal line.

On the derivative front, the NIFTY December futures have shed 50,850 shares or 0.27% in Open Interest. We can fairly conclude that though the Markets have discomfort at lower levels and the shorts have been covered, we can also interpret that the Markets are continuing to wear a cautious outlook ahead of two important events – coming out of GDP Numbers and RBI Credit Policy Review.

Coming to pattern analysis, the Markets have attempted to move out of the congestion zone that it had been trading in the last 15-17 sessions. However, it is important to note that though the Markets have attempted to move out of this congestion zone, it has not yet confirmed the breakout. Further to this, it is likely to approach its important pattern resistance at 8000-levels which also coincides with its 50-DMA. This may again cause the Markets to consolidate a bit more before it attempts to confirm the reversal.

All and all, given this reading on the technical charts, the undercurrent of the Markets remains cautious to mildly positive and bullish. However, again, as mentioned above, the Markets are yet to confirm its reversal and therefore continue to remain vulnerable to selling bouts from higher levels, especially given the pending two important events. Continuing highly stock specific approach with vigilant protection of profits at higher levels is advised for today.

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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