Daily Market Trend Guide -- Friday, December 11, 2015

MARKET REPORT                                                                             December 11, 2015

The Markets had a very predictable session as it showed a reluctant technical pullback and also resisted to the 7680 levels as analyzed in our yesterday’s edition of the Daily Market Trend Guide. The Markets saw a modestly positive opening but the morning trade saw the Markets gradually paring those gains. At one time, the Markets traded flat and even dipped very briefly in the negative while forming day’s low of 7610. The Markets spent its afternoon session with very limited gains in a capped territory. It was in the second half that the Markets saw some strength coming in. The Markets attempted a rebound saw some sharp gains coming in. It traded near to its opening gains and even gained further to form the day’s high of 7691.95. The Markets did resisted to its pattern resistance and finally settled the day at 7683.30, posting a modest gain of 70.80 points or 0.93% while forming a slightly lower top but higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, DECEMBER 11, 2015

Despite seeing a technical pullback, the Markets have continued to resist to the pattern support of 7680-7700 range that it breached on the downside. Today, we can expect a quiet and flat opening in the Markets but these levels will continue to dictate the trend of the Markets in the immediate short term.  Today’s opening and the behavior of the Markets will be critical as these levels will continue to pose resistance in the immediate short term.

For today, the levels of 7700 and 7740 will act as immediate resistance levels for the Markets. The supports come in at 7630 and 7550 levels.

The RSI—Relative Strength Index on the Daily Chart is 36.5019 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it continues to trade below its signal line.

On the derivative front, the NFITY December futures have shed over 6.92 lakh shares or 3.54% in Open Interest. This indicates that yesterday’s rally / pullback had to do with heavy short covering. The NIFTY PCR stands at 0.79 as against 0.78.

While having a look at the pattern analysis, the Markets have breached its triple bottom support of 7680 levels. Yesterday, it did see a pullback from the lower side due to it being oversold but quite on expected lines, it resisted to the 7680-7700 levels while pulling up. These levels and few points above will continue to pose resistance to the Markets while pulling back. There are chances that the Markets once again sees a ranged movement before it either attempts to continue with its pullback or see retracements again. The inherent structure of the Markets is weak and there are chances that it tests its lows again in coming session until a significant trigger sees it moving upwards.

Overall, we continue to reiterate to refrain from creating any aggressive long positions. Shorts to should be curtailed as the Markets are now likely to see a ranged movement before it resumes any clear directional call. Any profits on either side should be very vigilantly protected and overall exposures should be kept very limited and curtailed while having a very cautious outlook 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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com