MARKET TREND FOR WEDNESDAY, DECEMBER 07, 2016
While continuing to trade very much on expected lines, the
NIFTY ended the day with just minor gains after coming off from its highs in
the last hour of the day. It continued to consolidate heavily and also continue
to resist to its 200-DMA at Close levels. Today as well, we expect the Markets
to continue to consolidate with positive bias. Today, we have RBI Monetary
Policy to react to and a 50 bps cut in the Repo Rate is expected. Banks will
particularly react to this as we move ahead in the session and volatility is
expected to remain ingrained and the levels of 200-DMA will be critical to
watch out for.
For today, the levels of 8179 and 8250 will remain immediate
resistance levels for the Markets. The supports come in at 8090 and 8025
levels.
The RSI—Relative Strength Index on the Daily Chart is
43.3319 and it remains neutral as it continue to show no bullish or bearish
divergence or any failure swings. The Daily MACD remains bullish while trading
above its signal line. No significant Candle was observed apart from a spinning
top was observed in the yesterday’s session.
On the derivative front, the NIFTY has shed 21,150 shares or
just 0.14% in Open Interest. The OI figure has remain unchanged signifies no
major shorts or longs were added in the system and the NIFTY remained
direction-less on the Daily Charts.
While having a look at pattern analysis, the NIFTY is trying
hard to confirm the bottom that it formed at 7929 at Close levels. After
attempting to form base at this level, the NIFTY showed a decent pullback and
retraced some portion of that pullback. In the process, it currently trades
below the 200-DMA once again. Currently, it would be important for the Markets
to make a higher top and resume its up move. It would also be crucially
important for the Markets to move past the 200-DMA and sustain above that.
All and all, the levels of 200-DMA continue to remain
crucial and it is imperative for the NIFTY to move past that level and Close
above that. This will confirm the immediate bottom for the NIFTY and for this
resumption of the pullback is necessary. In today’s session, some volatility
will remain as the Markets will react to
the RBI Monetary Policy. The lead indicators and the F&O data suggest some
more consolidation but that would remain with a positive bias. All dips are
likely see short covering and some fresh purchases. With sector rotation and
some stock specific out-performance likely, continuation of cautiously positive
outlook is advised for the day.
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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