MARKET TREND FOR FRIDAY, DECEMBER 16, 2016
Indian Equities had a remarkably volatile session but the
overall trade remained more or less on similar lines. The NIFTY opened lower
but soon saw over a 100-odd point’s pullback from the pattern supports
mentioned in our yesterday’s edition. The last hour of the trade saw some
weakness and the NIFTY finally ended the day with a modest loss. Today’s
session is likely to remain critical for the NIFTY. The zones of 8140-8160 will
remain critical to watch out for. The rising yields in the US and other markets
is likely to prevent the NIFTY from a runaway rise and we can expect some more
consolidation in the Markets, though with a positive bias.
For today, the levels of 8172 and 8230 levels will act as
immediate resistance and the supports are expected to come in at 8120 and 8065
levels.
The RSI—Relative Strength Index on the Daily Chart is
45.3387 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Daily MACD remains bullish as it continues to trade
above its signal line. On Candles, a long lower shadow has occurred.
Since it has occurred during a pullback, it can act moderately bearish and if
the NIFTY forms a lower low today, it can bring in some temporary weakness in
immediate short term.
On derivative front, the NIFTY December futures have shed
over 9.96 lakh shares or 6.01% in Open Interest. This continues to make it
evident that NIFTY continued to witness some unwinding of long positions.
Coming to pattern analysis, it is now evident that post
formation of 7928 lows, the NIFTY has attempted to form a temporary base near
those levels. While pulling back, it has so far managed to form higher bottoms
and has been tracking a small rising channel trend line drawn from the recent
lows. The current Close has seen itself ending a notch below that level. The
zones of 8140-8160 will be important levels to watch out for as any dip below
8140 will see NIFTY attracting some temporary weakness. Also, NIFTY currently
trades below its 200-DMA 8216 and it would be critically important for the
NIFTY to move past and trade above these levels.
All and all, NIFTY once again remains in consolidation and
no-trade zones. The analysis for today remains on similar lines as shorts
should be avoided as the Markets have not shown any significant breach on the
Daily Charts. However, since it trades below 200-DMA, fresh purchases may be
made beyond 200-DMA and until this happens, exposures in the Markets should be
curtailed and kept to very select stocks. We reiterate to avoid major shorts
and maintain cautious outlook in the Markets. We will see CNXIT and select
MidCaps attempting to outperform.
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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