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
+91-98250-16331
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