MARKET TREND FOR MONDAY, DECEMBER 26, 2016
The Markets halted their more-than-a-week-old losing streak
as it came off its lows on Friday to end the day flat with minor gain of 6.65
points or 0.08%. Today, we enter the expiry week and we may see the coming
sessions dominated with rollovers. Today, we may see a stable opening in the
Markets and NIFTY may attempt an up move in the initial trade. However, the
Markets continue to hang in precarious balance with the levels of 7916 not
broken yet. It would be crucially important for the Markets to maintain above
the recent lows of 7916. Any breach below this is likely to bring in more
weakness in the immediate short term.
For today, the levels of 8045 and 8070 are likely to act as
immediate resistance levels while the supports are likely to come in at 7916
and 7850 levels.
The RSI—Relative Strength Index on the Daily Chart is
36.0486 and it is neutral and does not show any bullish or bearish divergence
or any failure swings. The Daily MACD is bearish as it trades below its signal
line. On Candles, no significant formation is observed.
On the derivative front, the NIFTY December futures have
added over 7.07 lakh shares or 5.49% in Open Interest. This is a mild
indication we might have seen buying coming in from
lower levels on Friday.
While having a look at pattern analysis, it is now very much
evident on the Daily Charts that though the NIFTY has formed its immediate
bottom at 7916, it has not confirmed this bottom as yet. It attempted to
pullback and even moved past the levels of 200-DMA but it failed to sustain at
those levels and retraced back. Though, currently it shows no structural breach
on the Daily Charts as it stands above 7916, an important pattern support in
form of recent lows. As mentioned earlier, it would be crucially important for
the NIFTY to sustain above the 7916 levels if it has to avoid any fresh
weakness from setting in.
Overall, with the lows of 7916 still being held by NIFTY we
would reassert not creating any major short positions as so long as NIFTY
trades above 7916, we cannot rule out short covering from lower levels. Fresh
purchases may be made but in very modest quantities. While NIFTY continues to
consolidate, liquidity should be maintained while the Markets decides its
directional bias.
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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.