Daily Market Trend Guide -- Friday, December 11, 2015

MARKET REPORT                                                                             December 11, 2015

The Markets had a very predictable session as it showed a reluctant technical pullback and also resisted to the 7680 levels as analyzed in our yesterday’s edition of the Daily Market Trend Guide. The Markets saw a modestly positive opening but the morning trade saw the Markets gradually paring those gains. At one time, the Markets traded flat and even dipped very briefly in the negative while forming day’s low of 7610. The Markets spent its afternoon session with very limited gains in a capped territory. It was in the second half that the Markets saw some strength coming in. The Markets attempted a rebound saw some sharp gains coming in. It traded near to its opening gains and even gained further to form the day’s high of 7691.95. The Markets did resisted to its pattern resistance and finally settled the day at 7683.30, posting a modest gain of 70.80 points or 0.93% while forming a slightly lower top but higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, DECEMBER 11, 2015

Despite seeing a technical pullback, the Markets have continued to resist to the pattern support of 7680-7700 range that it breached on the downside. Today, we can expect a quiet and flat opening in the Markets but these levels will continue to dictate the trend of the Markets in the immediate short term.  Today’s opening and the behavior of the Markets will be critical as these levels will continue to pose resistance in the immediate short term.

For today, the levels of 7700 and 7740 will act as immediate resistance levels for the Markets. The supports come in at 7630 and 7550 levels.

The RSI—Relative Strength Index on the Daily Chart is 36.5019 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it continues to trade below its signal line.

On the derivative front, the NFITY December futures have shed over 6.92 lakh shares or 3.54% in Open Interest. This indicates that yesterday’s rally / pullback had to do with heavy short covering. The NIFTY PCR stands at 0.79 as against 0.78.

While having a look at the pattern analysis, the Markets have breached its triple bottom support of 7680 levels. Yesterday, it did see a pullback from the lower side due to it being oversold but quite on expected lines, it resisted to the 7680-7700 levels while pulling up. These levels and few points above will continue to pose resistance to the Markets while pulling back. There are chances that the Markets once again sees a ranged movement before it either attempts to continue with its pullback or see retracements again. The inherent structure of the Markets is weak and there are chances that it tests its lows again in coming session until a significant trigger sees it moving upwards.

Overall, we continue to reiterate to refrain from creating any aggressive long positions. Shorts to should be curtailed as the Markets are now likely to see a ranged movement before it resumes any clear directional call. Any profits on either side should be very vigilantly protected and overall exposures should be kept very limited and curtailed while having a very cautious outlook on the Markets.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Thursday, December 10, 2015

MARKET REPORT                                                                                    December 10, 2015

The Markets continued to disappoint and ended with losses for the sixth day in a row as it widened its losses after a negative opening. The Markets opened on a relatively resilient note and attempted to defend its pattern support of 7680 levels in the initial trade while it formed its day’s high of 7702.85. However, weakness crept in as the session progressed and by late afternoon trade, the Markets breached its support of 7680. It continued in sideways trajectory in the afternoon trade and was not successful I in moving past the pattern resistance levels. In the second half, more so in the last hour of the trade, the losses widened as the Markets lost ground rapidly. It went on to form the day’s low of 7606.90. It finally settled the day at 7612.50, posting a net loss of 89.20 points or 1.16% while forming a sharply lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, DECEMBER 10, 2015

Markets have come off nearly 320-odd points in last six sessions. Today as well, though we can expect a modestly positive but quiet opening, the upsides will remain capped to the extent of pattern resistance that he Markets have broken. Though there are faint chances of technical pullback the upsides will remain limited until the Markets confirm any signs of bottom formation. Slightest of the weakness will see the Markets testing its 52-week lows and another pattern support of 7545 levels.

For today, the levels of 7645 and 7680 will remain resistance levels for the Markets. The supports come in at 7580 and 7545 levels.

The RSI—Relative Strength Index on the Daily Chart is 29.4823 and it now trades in oversold territory. Though it does not show any bullish or bearish divergence, it has reached its lowest value in last 14-days which is bearish. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY December futures have added over 2.93 lakh shares or 1.52% in Open Interest. This signifies some creation of short positions as well. The NIFTY PCR stands unchanged at 0.78.

Coming to pattern analysis, the Markets have breached one of its important triple bottom pattern supports of 7680 levels. This level, since now breached is likely to act as resistance in event of any technical pullback. The Markets may see mild technical pullback but the overall fabric has turned bearish and such pullbacks are likely to remain capped at 7680-7700 levels. Any weakness will see the Markets testing its 52-week lows of 7545 levels, which is also expected to act as support. However, given the oversold nature of the Markets, some technical pullbacks cannot be ruled out, even if it remains limited in nature.

Overall, today we can expect a quiet opening in the Markets. Some pullback may be seen later in the day but at the same time, it will continue to remain vulnerable to further selloffs from higher levels. However, any technical pullbacks / up moves should be utilized to book and protect swing profits but overall, it is advised to continue to remain very limited on exposures and avoid major purchases until the Markets shows some sign of bottom formation.

Milan Vaishnav,

Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA

Af. Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com