Daily Market Trend Guide -- Tuesday, December 08, 2015

MARKET REPORT                                                                               December 08, 2015

The Markets continued to disappoint as it had a listless session and ended the day into negative for the fourth day in a row. The Markets saw a decently positive opening exactly on expected lines. However, as feared, the Markets failed to sustained and capitalize on the positive opening. After opening positive, it formed its intraday high of 7625.40 in the early minutes of the trade. Thereafter, after spending few minutes in a capped movement, the Markets started to give up gradually. It pared all of its opening gains by late morning trade to trade flat. It remained into sideward trajectory in the afternoon and then once again started to give up gradually. It slipped into negative and by late morning trade, it slipped further to form the day’s low of 7746.05. Modest recovery was observed and the Markets finally settled the day at 7765.40, posting a net loss of 16.50 points or 0.21% while forming a slightly higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, DECEMBER 08, 2015

Though the Markets precariously managed to hang on to the pattern support yesterday, today we are expected to see a lower opening. This opening is likely to see the Markets opening below its current pattern support – a rising trend – support line – is likely to induce some very short term weakness in the Markets and the Markets may test it’s another important pattern support of 7680. However, with the volumes remaining relatively lower, it is also likely that the Markets improve as we go ahead in the session.

For today, the levels of 7790 and 7830 will act as immediate resistance. The supports come in lower at 7710 and 7680 levels.

The RSI—Relative Strength Index on the Daily Chart is 37.5615 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD, however, still continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY December futures have shed over 2.01 lakh shares or 1.03% in Open Interest. This indicates moderate unwinding of long positions in the Markets. The NIFTY PCR stands at 0.77 as against 0.79.

Coming to pattern analysis, the Markets yesterday managed to hang on to one of its pattern support in form of a rising trend line. However, today’s lower opening is likely to see it opening below that pattern support. Because of this, we may see the Markets testing another major trend support at 7680 levels. The Markets are likely to see some weakness in the immediate short term because of this. However, the overall volumes have been lower and we may continue to see the Markets remaining resilient at lower levels and also attempting to improve while going ahead in the session.

Overall, some weakness is likely to persist in the immediate short term. However, even if the Markets tests it’s another pattern support at 7680 there will not be any structural breach on the Charts. However, given the overall pattern analysis, the Markets may continue to remain subdued in the immediate short term. It is advised to refrain from taking any fresh exposures and continue to maintain cash along with 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

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