MARKET TREND FOR THURSDAY, DECEMBER 01, 2016
After resisting to the200-DMA in the first half of the
session, the NIFTY went on to move past it and ended the day with decent gains.
As of present Close, the NIFTY has touched and ended a notch above the other
pattern resistance of the return line (lower line of the falling Channel).
However, in the process, the NIFTY has established and confirmed a near term
bottom for itself and the levels of 200-DMA now should act as support in times
of consolidation at higher levels. Today, we can fairly expect a stable start
and expect the NIFTY to continue with its pullback at least in the initial
trade.
For today, the levels of 8255 and 8310 will act as immediate
resistance levels whereas the supports will come in at 8160 and 8105 levels.
The RSI—Relative Strength Index on the Daily Chart is
46.3382 and it has reached its highest value in last 14-days which is Bullish.
Also, RSI has set a fresh 14-period high whereas NIFTY has not yet and this
translates into Bullish Divergence. The Daily MACD is bullish as it trades
above its signal line.
On the derivative front, the NIFTY December futures have
added over 5.08 lakh shares or 3.37% in Open Interest. This clearly indicates addition
of fresh longs in the system as the increase in NIFTY has resulted along with
rise in Open Interest.
Coming to pattern analysis, the NIFTY has successfully
pullback after establishing a immediate low of 7929 at Close. This level is
likely to act as major support in future in event of any short term consolidation.
Also, the NIFTY has managed to move past the 200-DMA which is 8161 and in event
of any short term reactive downsides, this level should now act as Support. The
NIFTY now currently tested the return line (lower support line of the falling channel)
and has closed a notch above this. Overall, this reading, along with the
F&O data and the lead indicators clearly indicates that apart from minor
corrections and some consolidation, the bias remains on the positive side and
the upticks are likely to continue.
All and all, though some amount of consolidation, like the
one that happened in the first half of the previous session, the overall bias
remains on the upside. Any short term reactive movements are likely to find
support at 200-DMA while the levels of 7929 remains a short term bottom for the
Markets. We continue to reiterate making purchases with each corrective
movements and maintain a positive outlook on the Markets.
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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