Daily Market Trend Guide -- Monday, December 28, 2015

MARKET REPORT                                                                                 December 28, 2015

The Markets were as flat as it could on Thursday before long weekend as it spent a ranged session and ended the day with minor losses. The Markets did saw a modestly positive opening but formed its intraday high of 7888.75 in the early minutes of the trade. After trading briefly in the green, the Markets pared its opening gains and traded flat. The most part of the trading session was then spent in a very capped and narrow trajectory and the Markets headed nowhere during this time. It saw some weakness creeping in the second half of the session while it made its day’s low of 7835.50. Markets soon recovered these losses and finally ended the day at 7861.05, posting minor loss of 4.90 points or 0.06% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, December 28, 2015

Markets open today after a long weekend holiday following Christmas and given the technical indicators, we would continue to keep the analysis for the coming week more or less on similar lines. The Markets are expected to open flat and look for directions in the initial trade and the levels of 7800-7820 would be important to watch out for as it would be very critically important for the Markets to maintain itself above these levels. The volumes would continue to remain on lower side due to year end.

The levels of 7880 and 7925 will act as immediate resistance for the Markets. The supports come in at 7820 and 7770 levels.

The RSI—Relative Strength Index on the Daily Chart is 52.8861 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above it signal line. On the Weekly Charts, the Weekly RSI is 45.3866 and it remains neutral as well without showing any bullish or bearish divergence or any failure swings. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY December futures have shed over 7.15 lakh shares or 4.18% in Open Interest. The January Series have added over 6.25 lakh shares or  17.95% in Open Interest. The Net change in OI remains very negligible and the NIFTY PCR stands unchanged at 0.83.

Coming to pattern analysis, the Markets have attempted to confirm the reversal by giving a higher bottom after pulling back from its double bottom / 52-week low supports. After pulling back from those supports, the Markets had a intermediate consolidation and thus giving a higher bottom, attempted to move up again. Now that it has done so, the levels of 7800-7820 remain critically important as the Markets will have to maintain itself above that in order to prevent any weakness from returning once again. So long as the Markets remain above these levels, the next logical levels that we can expect are the 50-DMA levels, i.e. 7930.

All and all, though we continue to keep the analysis on the similar lines like previous week, the levels of 7800-7820 remain critical to watch out for. Also, the volumes are likely to remain lower and this may keep the Markets devoid of required depth. We may see such lower volumes in the entire week given the year end days. Over all, while continuing to make select purchases, positively cautious outlook 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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