MARKET TREND FOR MONDAY, DECEMBER 12, 2016
The Friday’s session saw the NIFTY consolidating very much
on expected lines as the Markets traded in a very capped and narrow range and
ended the day with minor gains. Today, we may once again see a stable start to
the session but possibility of the NIFTY continuing to consolidate cannot be
ruled out. Today’s opening and the trajectory that the NIFTY forms after
opening will be crucial to decide the trend for the day. In event of any
consolidation, the 200-DMA of NIFTY will act as support at lower levels. On the
upper side, we can fairly expect the Markets to continue with its up move to
its logical targets set forth.
For today, the levels of 8290 and 8335 will act as immediate
resistance levels for the Markets. The supports come in at 8220 and 8175
levels.
The RSI—Relative Strength Index on the Daily Chart is
51.3548 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 is very much
bullish as it trades above its signal line. On Candles, a Spinning Top
occurred. This is little significance as
it often denotes a session with is very narrow in range and often
direction-less and indecisive.
On derivative front, the NIFTY December futures have added
yet another 2.85 lakh shares or 1.70% in Open Interest. This indication
continuation of bullish inclinations in the Markets.
Coming to pattern analysis, the NIFTY has moved past its
200-DMA levels and have close above that. In the previous session as well, it
has managed to stay comfortably above 200-DMA. It has done so after forming a
higher bottom after a retracement from a pullback which it began after forming
recent lows of 7928 levels. As of now, the NIFTY has confirmed this bottom for
the immediate short term. Even if the NIFTY consolidates, the 200-DMA will
remain its immediate support at Close levels.
The 200-DMA of the NIFTY stays at 8196 today and even if the
Markets consolidate this level will be the crucial levels to watch out for. The
overall structure of the technical charts, the lead indicators supported by the
F&O data, we can fairly conclude that the Markets continue to display
inherently bullish bias. Any short term consolidation will have limited
downsides. We continue to reiterate to avoid major short positions and maintain
cautious optimism in 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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