MARKET TREND FOR FRIDAY, DECEMBER 02, 2016
Much on the expected lines, the NIFTY halted its pullback
and consolidated in while ending the day with modest losses. The Markets
remained stable in the first half but NIFTY saw declines mainly led by corrective
movements in banks, auto and telecom stocks. Today, we expect a stable opening
to the Markets but the range bound consolidation is likely to continue with the
levels of 200-DMA which is 8165 acting as immediate support. Overall, as
indicated by various evidences, the consolidation in the Markets is likely to
remain in a capped range and the overall bias continues to remain positive.
For today, the levels of 8250 and 8325 will act as immediate
resistance levels for the Markets. The supports come in at 8165 and 8105
levels.
The RSI—Relative Strength Index on the Daily Chart is
44.6703 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Daily MACD remains bullish as it trades above its
signal line. On the Candles, a black candle has occurred. This has no
significance and it does not qualify to be a Dark Cloud Cover as the
close of the current Candle is not below the midpoint between the opening and
closing prices of the previous day.
On the derivative front, the NIFTY December futures have
added yet another 5.01 lakh shares or 3.22% in Open Interest. This clearly
shows some more addition of short positions in the system.
Coming to pattern analysis, the pullback that was seen in
NIFTY since the lows of 7929 at Close levels has been expectedly halted as it
has resisted to the previous support that it breached on the downside. It has
halted at the return line (lower support line) of the falling channel that it
has breached on the downside. It will need to move past the levels of 8225-8230
and stay above that to be back again to avoid any weakness once again in the
short term.
Overall, the only spoilsport that the Markets may face is
the US Bond yields not relenting and the Bonds continuing to show downward
pressure despite oversold levels. This may cause the Markets to show some
temporary weakness or a range bound consolidation which may be accompanied with
volatility. Apart from this, if we individually examine the F&O Data, the
evidences from the lead indicators and overall present structure, we feel that
after some consolidation, the pullback may continue. We advice cautious
optimism on the Markets and expect stock specific out-performance to continue.
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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