Daily Market Trend Guide -- Thursday, December 03, 2015

MARKET REPORT                                                                             December 03, 2015

Yesterday’s session continued to remain yet another disappointing range bound session as the Markets could not sustain its positive opening and ended the day with modest losses.  The Markets saw a modestly positive opening and formed its intraday high of 7979.30 in the early minutes of the morning trade. However, soon after this, the Markets pared its gains to trade flat. The weakness in the Markets intensified more in the late morning trade as the Markets went on to form the day’s low of 7910.80. Some recovery was seen in the last hour of the trade but before that the Markets spent a directionless session which remained in a very capped and narrow range. The Markets finally settled the day at 7931.35, posting a net loss of 23.55 points or 0.30% while forming a slightly higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, DECEMBER 03, 2015

Today’s analysis once again continues to remain more or less on similar lines. The Markets are likely to open on a modestly negative note and look for directions. Though the Markets have attempted to move out of the congestion zone, it is continuing to resist to its pattern resistance and 50-DMA levels which exist in the range of 8000-8005 levels. Until the Markets manage to move past these levels, we will continue to see subdued movements with the Markets continuing to remain vulnerable to selling pressures from higher level.

For today, the levels of 7960 and 8010 will act as immediate resistance levels for the Markets. The supports come in at 7905 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.4371 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY December futures have shed over 1.63 lakh shares or 0.84% in Open Interest. This figure does not suggest any major shift of sentiment in the Markets. The NIFTY  PCR stands at 0.84 as against 0.87.

Coming to pattern analysis, the Markets have continued to resist to its key pattern resistance levels of 8000. As mentioned earlier, the 50-DMA of the Markets is 8003 and these two levels collectively pose a important resistance to the Markets. It would be critically important for the Markets to move past these levels if it has to make any decisive up move. Not only will the Markets have to move past these levels, it will have to do it with good amount of participation and volumes as well. As often mentioned in our previous editions, until this happens, the Markets will continue to trade in a range with intermittent selling bouts from higher levels even if the undertone remains buoyant.

All and all, while keeping the analysis on the same lines, we continue to reiterate to refrain from shorts as both lead indicators and F&O data suggest underlying buoyancy in the Markets. Somewhat sentimental reactions can be expected to the ECB meet today wherein some stimulus are expected but overall, speaking purely on technical terms, fresh up moves will occur only above 8000-8010 levels.  Until then, highly stock specific approach with protection of profits at higher levels should continued to be adopted.

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
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