MARKET TREND FOR THURSDAY, DECEMBER 22, 2016
The Markets had a disappointing session as it failed to
maintain its modest gains and ended with modest losses for the sixth day in a
row. The NIFYT came off from its modest highs in the last hour of the trade
ending with losses. Today as well, we continue to expect the session to remain
lackluster and we will see NIFTY moving around in a capped range. With holiday
season weighing around, the volumes too are expected to remain thin and the
200-DMA level which is 8238 will continue to remain key resistance for the
NIFTY in the immediate short term.
For today, the levels of 8115 and 8180 will remain immediate
resistance levels for the Markets. The supports come in at 8030 and 7980
levels.
The RSI—Relative Strength Index on the Daily Chart is
39.9257 and no failure swings are observed. The NIFTY has formed yet another
fresh 14-period low while RSI has not yet. This has shown “Bullish Divergence”
for the second day in a row. The Daily MACD remains bullish as of now as it
trades above its signal line. However, if such trend continues, we might see it
reporting negative crossover. No significant formations on Candles are
observed.
On the derivative front, the NIFTY December series have gone
on to shed yet another 1.31 lakh shares or 0.91% in Open Interest. This makes
evident that reduction / offloading of positions has continued though with a
lesser ferocity.
While having a look at pattern analysis, the NIFTY has so far held on to the recent lows made at
7928. However, while it has attempted to confirm this bottom and mark a
reversal, it has not done so today. Though this bottom stands protected, it
does not stand confirmed. The very fact that the NIFTY has failed to sustain
above 200-DMA, makes it vulnerable to some more continued weakness in immediate
short term.
However, the fact that retracements are come in on much
lower volumes should not be ignored. There are chances that the NIFTY may
continue to see such modest declines but also now start seeing intermittent
pullbacks from higher levels as it still trades above its key supports and
these key supports have not been broken as yet. We continue to advise to
refrain from creating any major directional exposures. Some pockets like IT,
ENERGY, and select CNXMID50 stocks are likely to out-perform.
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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