Daily Market Trend Guide -- Tuesday, December 22, 2015

MARKET REPORT                                                                         December 22, 2015

Markets saw a negative opening but also saw a smart rally from the opening lows and ended the day with decent gains. The Markets saw a modestly negative opening on expected lines and formed its intraday low of 7733.45 in the morning trade. The Markets traded with capped losses in the morning trade but the late morning trade saw a sharp up move from the low point of the day. However, the Markets resisted to its important resistance levels of 7800 as it traded in sideways trajectory after touching these levels. However, the second half of the session saw some more strength coming in as the Markets remained in upward rising trajectory and kept forming new highs gradually. It finally formed its intraday high of 7840.75 in the late afternoon trade and the Markets were able to maintain these levels. It finally settled the day at 7834.45, posting a decent gain of 72.50 points or 0.93% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, DECEMBER 22, 2015

We are likely to see a flat opening today and the Markets are likely to oscillate in a capped range. The Markets have attempted to remain above 7800 levels and today as well, in event of any minor downsides, it would be very important for the Markets to remain above this level in order to just consolidate and avoid any weakness from creeping in. The volumes would continue to remain lower as well.

For today, the levels of 7850 and 7910 will act as immediate resistance levels for the Markets. The supports come in at 7800 and 7730 levels.

The RSI—Relative Strength Index on the Daily Charts stands at 51.2887 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 its signal line.

On the derivative front, the NIFTY December futures have shed nominal 88,875 shares or 0.48% in Open Interest. This certainly indicates minor short covering in net terms but the change in OI remains negligible. The NIFTY PCR stands at 0.81 as against 0.78.

Coming to pattern analysis, if we take a broader look, the Markets bounced back nearly 300-odd points from its very important pattern support and 52-week low levels of 7540. Having done this, it is now attempting to confirm a bottom. In previous couple of sessions, the Markets have consolidated in a broad range of 100-oddpoints and have so far managed to remain above one of its important pattern resistance levels of 7800. In ideal situation, we can see the Markets consolidating in a ranged manner for some more time and ultimately resuming its up move. In order to confirm its bottom and resume its up move, it would be important for the Markets to stay above 7800 levels.

All and all, the levels of 7800-7810 remain critical to watch out for. Any breach below these levels will delay the confirmation of a bottom and will keep the Markets vulnerable to selling pressures. The volumes would be important but due to the week shortened by holidays, we can expect volumes to be thin. It is advised to continue to adopt very cautious and stock specific 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

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