Daily Market Trend Guide -- Wednesday, December 30, 2015

MARKET REPORT                                                                              December 30, 2015

Markets had a range bound but volatile session yesterday as it ended on a flat note with negligible gains after a V-shaped recovery. The Markets saw a quiet opening and after opening on a modestly positive note, it traded in capped range. The Markets saw itself trading with limited gains in the morning but strengthened a bit to form the day’s high of 7942.15. However, the afternoon trade saw the Markets coming off from its morning gains. The Markets pared all of its gains and dipped into negative. It saw a near vertical paring of gains as it formed its day’s low of 7902.75. The second half of the session saw the Markets recovering all of its losses to trade back into positive. The Markets continued to hover in the positive trajectory and finally ended the day at 7928.95, posting a negligible gain of 3.80 points or 0.05% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, DECEMBER 30, 2015

The Markets have ended yesterday after a V-shaped recovery and speaking purely on technical grounds, they are expected to continue with the up move. However, we are likely to see the Markets opening on a flat note and look for directions in the first half. There are chances that we may see the Markets improving as we go ahead in the session. Today, we enter into penultimate day of the expiry of the current series and the session will continue to remain dominated with rollovers centric activities.

For today, the levels of 7955 and 8005 will act as immediate resistance levels for today. The supports come in at 7920 and 7870 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.0121 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 trades above its signal line.

On the derivative front, rollovers continued as NIFTY December series shed over 24.07 lakh shares or 15.95% in Open Interest and January series added over 44.32 lakh shares or 62.59% in Open Interest. Net OI addition of over 20 lakh shares was seen and the NIFTY PCR stands at 0.88 as against 0.86.

Coming to pattern analysis, the Markets have attempted to advance after resisting to its 50-DMA for the entire day yesterday. Next logical resistance would come in at its 8000-8010 levels which is its major pattern resistance as well as the 100-DMA of the Markets. So long as the Markets continue to trade above the important levels of 7920, we see fair chances of the Markets testing 8000 levels. Some F&O data also suggests strong support around 7920. However, any slip below 7920 will see the Markets consolidating once again in capped range.

All and all, as mentioned, so long as Markets trade above 7920, it has good amount of chances that it tests 8000 levels in a day or two. Also, even if we see some consolidation happening at current levels, it is likely to remain capped in a very narrow range. We continue to reiterate making very selective purchases while protecting profits at higher levels. Positive caution is advised for today.

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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