MARKET TREND FOR THURSDAY, NOVEMBER 24, 2016
The Markets continued to end the day yesterday with modest
gains after recovering from the morning lows. It is important to note that that
NIFTY has ended in green for the second day in a row but it is lacking the
conviction that a strong sustainable pullback requires. Today, we enter the
expiry day of the current derivative series and we will see the session
remaining dominated with rollover centric activities and we will continue to
see volatility remaining ingrained in the Markets. The sustenance above 8040
levels will be critical to watch for as we expect a subdued, and flat to mildly
negative opening for today.
Today, the levels of 8065 and 8144 will act as immediate
resistance levels for the Markets. The supports come in at 7975 and 7920
levels.
The RSI—Relative Strength Index on the Daily Chart is
30.8628 and it has just crossed above from a bottoming formation which is
bullish. It does not show any bullish or bearish divergence or any failure
swing. The Daily MACD still rules bearish as it continues to trade below its
signal line. On significant formation on Candles is noticed. The current
candles closely resembles a hammer but presence of negligible upper
shadow and less-than-required length of the lower shadow makes is very less
important a formation in relative terms.
On the derivative front, the NIFTY November series shed
25.08 lakh shares or 16.44% in Open Interest. The NIFTY December series saw
addition of 24.95 lakh shares or 37.30% in OI. There has been net shedding of
OI seen though the NIFTY PCR still
remains much lower and at comfortable levels.
Coming to pattern analysis, as we have often mentioned that
the NIFTY has completed the measuring implications associated with it breaching
the falling channel on the downside. It currently trades below the 200-DMA and
has been attempting to find a base in the current zone. At Close, it would be
critically important for the NIFTY to maintain close above 8050 levels to avoid
weakness from reappearing. If it does so, it is likely to logically proceed
towards its immediate resistance levels of 200-DMA which is 8144 today. Ruling
below 8050 is likely to induce some temporary weakness once again.
Overall, given the expiry day, we will see the session remain
dominated with rollovers. If we examine the inverse relation of the Equity
Markets with US10-YR Bond Yield, it still has some room left on upside on
Weekly Charts. This may keep our domestic markets spooky on week-on-week basis.
We may see the Markets oscillating in a broad range wherein we have to see if
it shows any sign of accumulation. We strongly reiterate to stays away from
participation in event of any downsides and avoid creation of fresh shorts. All
dips are likely to see sector rotation and select purchases. Cautious but
positive view is advised for today.
Milan
Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA
http://milan-vaishnav.blogspot.com
+91-98250-16331
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