Daily Market Trend Guide -- Wednesday, December 02, 2015

MARKET REPORT                                                                             December 02, 2015

Markets once again had a range bound session as the RBI Credit policy remained a non-event on expected lines. The Markets saw a modestly positive opening and it traded with capped gains in the morning trade. While RBI Policy review came up wherein RBI kept all rates unchanged which was anyway expected, the Markets saw some sharp activity while it formed its day’s low of 7934.15. It soon recovered from those levels and came back in the range that it was trading since morning. Markets managed to move past its range while forming day’s high of 7972.15 but soon returned to its trajectory once again. The entire session was spent more or less in sideways trajectory and the Markets finally settled the day at 7954.90, posting a modest gain of 19.65 points or 0.25% while forming a slightly higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, DECEMBER 02, 2015

Markets have been making reluctant attempts to move past its congestion zone and today as well, we are likely to see a modestly positive opening in the Markets. Though the Markets are now past the outcome of GDP numbers, IIP Data and RBI Credit Policy review, it has not been taking a clear directional call as it trades near its pattern resistance. Today’s opening too would see the Markets opening around its resistance levels and therefore the intraday trajectory that the Markets form after opening would be crucial to watch out for.

For today, the levels of 7970 and 8010 will act as immediate resistance levels whereas supports would come in at 7920 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 51.4716 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it continues to trade above its signal line.

On the derivative front, the NIFTY December futures have added over 3.03 lakh shares or 1.58% in Open Interest. The NIFTY PCR stands at 0.87 as against 0.91 yesterday. The Markets have been seen building a base in this range and this keeps the undercurrent buoyant.

While having a look at pattern analysis, the Markets have been attempting to move out of the congestion zone that it has been trading in the previous fortnight. However, though the Markets have managed to move out of this zone, it has not done so decisively and with conviction. It has been making a reluctant up moves and at the same time, it is also approaching its important pattern resistance which also coincides with its 50-DMA. It would be important to see the behavior of the Markets vis-à-vis these levels.

All and all, for any decisive up move to come in, the Markets will have to move past the levels of 8000-8010 which happens to incorporate an important pattern resistance as well as the 50-DMA. Until this happens, we will continue to see the Markets trading in a capped range and also remain susceptible to selling bouts from higher levels. However, with the lead indicators suggesting the undertone being buoyant, stock specific approach with selective but limited buying should be adopted while continuing to protect profits at higher levels.

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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