Daily Market Trend Guide -- Thursday, December 31, 2015

MARKET REPORT                                                                               December 31, 2015

Markets had a thoroughly disappointing session yesterday as it ended the day with losses after spending the entire first half in the sideways trajectory. The Markets saw a modestly positive opening but it formed its intraday high of 7944.55 in the early morning trade while it spent the morning session in a very capped and narrow range. Nearly entire first half was spent in the sideways trajectory as the Markets headed nowhere and remained totally directionless. It was the second half which did the undoing as the Markets suddenly witnessed selling pressure amid low volumes. It slipped and while remaining in falling trajectory, kept making gradual lows. It formed its intraday low of 7889.85 in the final minutes of the trade. No major recovery was seen and the Markets finally settled the day at 7896.25, posting a loss of 32.70 points or 0.41% while forming similar high but lower low on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, DECEMBER 31, 2015

Markets are likely to see lacklustre opening and is likely to open on a quiet note once again. Today is the expiry of the current derivative series and apart from the jitters that we witness because of that, the session is likely to once again remain range bound and choppy and would continue to remain dominated with the rollover centric activities. The level of 50-DMA have continue to act as resistance at Close levels and it continues to remain as important level to watch out for.

For today, the levels of 7915 and 7965 will act as resistance and the supports would come in at 7870 and 7840 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.3644 and it continues to remain neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY December futures have shed over 25.34 lakh shares or 19.97% in Open Interest. January series added over 24.44 lakh shares in Open Interest. There was net reduction in net Open Interest and the NIFTY PCR stands at 0.87 as against 0.88. Rollovers have remained in line with the previous 3-months average.

Coming to pattern analysis, the Markets have resisted at its 50-DMA levels which stand at 7915 today.  Couple of intraday penetrations were observed in previous sessions but the resistance have stood valid at Close levels. If the Markets move past this level, the next logical targets for the Markets will be the important level of 8000. This is a major pattern resistance and it also coincides with the 100-DMA. Until the Markets moves past 50-DMA, it will continue to hover with a weak under tone and the levels of 7820-7840 will act as important support zone. Any breach below this will induce some more weakness.

All and all, with the session expected to remain dominated with rollovers, not much movements are expected beyond a range. However, jitters due to rollovers cannot be ruled out. Volumes will continue to remain lower due to holidays. Overall, it is advised to remain light on overall exposure until the directional bias is set and wear a 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
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