Wednesday, December 14, 2016

Daily Market Trend Guide -- Wednesday, December 14, 2016

MARKET TREND FOR WEDNESDAY, DECEMBER 14, 2016
Markets had a good session yesterday as it tracked the pattern support on the Daily Charts and ended the day on a positive note. The NIFTY saw a stable opening but it was the second half that saw the Markets moving past its 200-DMA once again and ending the day a notch above it. Today, we expect flat to mildly positive start to the Markets and we expect the NIFTY to continue with its up move at least in the initial trade. Global cues have not sprung any negative surprise and with the yields remaining stable, we expect positive stability in the Markets. Markets will keenly watch FOMC meet over next two days to come wherein it has more or less discounted 25bps rate hike by the Federal Reserve.

For today, the levels of 8275 and 8330 will act as immediate resistance levels for the Markets. The supports come in at 8205 and 8120 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.2456 and it remains neutral as it shows no failure swings or any bullish or bearish divergence. The Daily MACD remains comfortably bullish as it continues to trade above its signal line. No significant formation on Candles is seen.

On derivative front, the NIFTY December futures have added over 4.57 lakh shares or 2.77% in Open Interest.

Coming to pattern analysis, after forming recent lows of 7916, the NIFTY has attempted to form higher lows and is currently in the process of confirming a reversal. Though it has comfortably marked these levels as its immediate short term bottoms, it has been forming a small rising channel while pulling back as evident from the Charts. The levels of 8120-8150 will now act as important pattern support in coming days while the NIFTY consolidates and continues with its up move. It would be very much desirable if the NIFTY is able to maintain itself above 200-DMA which stands at 8207. However, in event of any downside risks while the NIFTY reacts to FOMC decision in coming days, the zones of 8120-8150 will remain important pattern supports to watch out for.

Overall, the NIFTY is likely to continue to trade with positive bias and we continue to reiterate our advice to continue to make modest purchases with every consolidation or intermittent bouts. Today and in coming days, we will continue to see sectoral outperformance and IT Stocks, Energy, etc will continue to see select purchases. Overall, so long as NIFTY maintains the levels above 8120-8150 range, positive outlook should be maintained on the Markets. Tapering of Bond yields and some tapering off will extend help to this reading.

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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