MARKET TREND FOR TUESDAY, DECEMBER 20, 2016
Indian equities headed nowhere on Monday for the most part
of the session but slipped in the last hour of the trade to ended once again
with modest losses. The NIFTY remained in 20-odd points range for the entire
session but the last hour of the trade saw it losing ground. Today, we can
expect some stability to return to the Markets. We can expect flat to modestly
positive opening. This will require support from external technical factors and
we expect some tapering of yields in the US Bonds to aid to these expectations.
As of now, the 200-DMA of the NIFTY which stands at 8227 to act as important
resistance for the Markets while it struggles to confirm its reversal.
For today, the levels of 8175 and 8225 will act as immediate
resistance while the supports will come in at 8075 and 8030 levels.
The RSI—Relative Strength Index on the Daily Charts is
42.4568 and it continues to remain neutral while showing no bullish or bearish
divergence. It also does not show any failure swing. The Daily MACD remains bullish while trading
above its signal line. No major formation was observed on Candles.
On the derivative front, the NIFTY December futures have
continued to shed over 3.04 lakh shares or 2.05% in open interest. This implies
continuation of unwinding / offloading of positions.
Coming to pattern analysis, the reading remains more or less
similar as no major changes in pattern is observed. Post formation of lows at
7968 levels, the NIFTY has reversed its trend but has not confirmed its
reversal. It has failed to sustain above its 200-DMA as of today and this
remains a cause of major concern. There is no major structural breach on the
Daily Charts but in the same breath, we do not expect any runaway rise to occur
until the NIFTY shows some signs of buying at lower levels. Currently, it
trades in a broad trading range heading nowhere.
Overall, just like as we mentioned yesterday, we do not see
any structural breach and this makes it clear that shorts at any levels should
be avoided. So far as making fresh purchases is concerned, it should be done in
limited quantities maintaining more amount of cash and liquidity as the NIFTY
still rules below 200-DMA. Sectoral outperformance will be evident and pockets
like IT and select midcaps are likely to continue to out-perform.
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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