MARKET TREND FOR WEDNESDAY, DECEMBER 21, 2016
Indian Equity Markets had yet another list-less session as
it continued to post modest losses while dealing on very low volumes. The NIFTY
opened modestly positive but ended with a minor loss after coming off from its
intraday lows. Today, our analysis remains more or less on similar lines once
again. We can expect a flat to modestly positive opening in the Markets.
However, the intraday trajectory that the Markets form will be critical to
decide the trend for today. The fact that the NIFTY trades below its 200-DMA is
important and this level will continue to remain a crucial levels to watch out
for.
For today, the levels of 8145 and 8190 will act as immediate
resistance levels for the Markets. The supports come in at 8050 and 8010
levels.
The RSI—Relative Strength Index on the Daily Chart is
41.4173 and it shows no failure swings. However, the NIFTY has set a fresh
14-day low while RSI has not and this has formed “Bullish Divergence” on Daily
Charts. The Daily MACD remains bullish as it trades above its signal line. No
major / significant formation on Candles is seen.
On the derivatives front, the NIFTY December futures have
shed over 1.64 lakh shares or 1.13% in Open Interest. Though the ferocity has died
down but still unwinding / offloading of positions remains evident in the
Markets.
Coming to pattern analysis, the NIFTY has failed to confirm
the recent lows of 7928 that it has formed recently. It has managed to pullback
and attempted to form a higher high in order to confirm this bottom but it has
not been able to do this so far and this remains an area of concern in the
immediate short term. The fact that it has not able to sustain above 200-DMA
which stands at 8232 today is also important and it would be critically
important for the NIFTY to move past this level as this is likely to pose
itself as a major pattern resistance.
Taking all this into account, we should also not discount
one fact that the undercurrent remains very much positive and there is not
structural breach on the Daily Charts. Though the weakening Rupee remains a
cause of concern, the yields remaining under control and other signals thrown
back by lead indicators and overall structure of the Charts continue to keep
our inherent view bullish .Though NIFTY may decline a bit but it would remain
under very low volumes. It is continued to be reiterated that one should
continue to make moderate and stock specific purchases with every minor
downsides while maintaining a cautious view on the Marktes.
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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