Daily Market Trend Guide -- Tuesday, December 01, 2015

MARKET REPORT                                                                               December 01, 2015

Markets spent a very capped and narrow session as the caution weighed in heavily ahead of two important numbers that the Markets expected. The Markets saw a quiet and subdued opening as it opened a bit lower. After trading briefly into a capped range the Markets formed its intraday high of 7966 in the early morning trade. Thereafter the Markets transformed itself into a sideways trajectory and spent the entire session in a very narrow and capped range. The Markets saw no directional bias at all as the entire session was spent in a narrow 25-odd points range. At one point in the late afternoon trade, the Markets slipped a bit to form the day’s low of 7922.80. However, it settled the day at 7935.25, posting a net loss of 7.45 points or 0.09% while forming a slightly higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, DECEMBER 01, 2015

The GDP Numbers that came out stood at 7.4%, little better than the estimates of 7.3% and the IIP numbers too remained in line with the expectations. The Markets are set to open on a flat to quietly positive note following this and would look forward to RBI Credit Policy review which is slated to come up later today. However, it is important to note that with no rate cut expected this time, it is very much likely to remain a non-event.

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

The RSI—Relative Strength Index on the Daily Chart is 49.8733 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bullish as trades above its signal line.

On the derivative front, the NIFTY December futures have added over 4.74 lakh shares or 2.54 lakh shares in Open Interest. Though the Markets have traded in a capped range, fresh positions have been built in the index as well as stock futures resulting in addition of Open Interest.

Coming to pattern analysis, the picture remains similar to what we explained in the yesterday’s edition. The Markets have attempted to form a base but are yet to confirm it. In event of any up move, they are likely to approach its pattern resistance levels of 8000 which also coincides with its 50-DMA. The Markets will need to move past these levels for any decisive directional call. Until the Markets resist these levels, we will continue to see a range bound congestion zone continuing to exist with the Markets remaining vulnerable to selling bouts.

Overall, the opening is expected to be quiet and positive and the Markets are likely to trade in a capped range until it reacts to the RBI Policy Review. With no rate cut expected, this too is likely to remain a non-event. The markets will be able to make a decisive directional call only after it moves past 8000-levels. Until this happens, it will continue to lack any directional bias though the undercurrent remains positive.

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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