Tuesday, December 13, 2016

Daily Market Trend Guide -- Tuesday, December 13, 2016

MARKET TREND FOR TUESDAY, DECEMBER 13, 2016
The session on Monday remained much weaker than what was expected as it ended the day with a cut of 90.95 points or 1.10% with clear out-performance coming in from IT stocks. Today, we  expect a stable start to the Markets but since NIFTY has once again closed a notch-below its 200-DMA which stands at 8202 today, we would advice participants to refrain from taking any major directional exposure. However, even with the decline, the NIFTY continue to rest at a pattern support. The levels of 8202 and 8120 will remain critical levels to watch out for.

For today, the levels of 8200 and 8285 will remain immediate resistance levels for the Markets. The supports come in at 8120 and 7980 levels.

The RSI—Relative Strength Index on the Daily Chart is 46.1234 and it remains neutral showing no failure swings or any bullish or bearish divergences .The Daily MACD continue to remain bearish as it trades above its signal line. On Candles, a falling window (a gap) occurred. This usually has bearish implications going ahead unless the NIFTY formed a bar with a higher bottom in the following session.

On the derivative front, the NIFTY December has shed over 6.48 lakh shares or 3.78% in Open Interest. This shows some unwinding / reduction in the positions in the Markets.

Coming to pattern analysis, the NIFTY confirmed its bottom at 7928 levels for the immediate short term. It has been attempting to reverse the trend but reversal is not yet confirmed in the convincing manner. The NIFTY has been forming a mildly rising channel from these levels but in the process, has not managed to move past 200-DMA in a convincing manner. At present, it has closed a notch below the 200-DMA which stands at 8202 today. It would be of paramount importance for the NIFTY to move past its 200-DMA to continue with its attempt to confirm the reversal.

All and all, the NIFTY has come into a no-trade levels once again as it rules below 200-DMA. We reiterate our view not to create any major short positions as the inherent trend in the NIFTY remains intact and we expect the NIFTY to attempt and continue with its pullback once again. Once the NIFTY scales above 200-DMA once again, one can start making select purchases once gain. So long as NIFTY trades below the 200-DMA, any major directional exposures should be avoided. With bond yields across Europe and US taking some breather, some stability returning to the Markets can be expected.

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


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