WEEKLY MARKET OUTLOOK FOR AUG 21 THRU AUG 25, 2017
The Friday’s session saw developments at Infosys weighing
heavy but still the benchmark NIFTY50 ended the week on a positive note gaining
126.60 points or 1.30% on Weekly basis. The coming week is once again a short
one with Friday being a trading holiday on account of Ganesh Chaturthi. The
reading for the coming week remains pretty clear. Neither the Markets see any
runway resumption of up move nor will it see any major breakdown. It trades in
a broad upward rising channel and will continue to do so trading in a defined
range.
The Markets will see the levels of 9950 and 10150 as its
immediate resistance levels while supports will come in at 9685 and 9580
levels.
The Relative Strength Index – RSI on the Weekly Chart is
64.0066 and it remains neutral showing no divergence against the price. The
Weekly MACD has just turned bearish and it trades below its signal as it has
reported a negative crossover.
If we look at Pattern Analysis, we see the Markets trading
in a long 18-month upward rising channel. The Markets tested the upper
resistance line of this channel and has resisted around this. Even if we see
some ranged correction, we will see the Markets trading comfortably in this
upward rising channel as evident in the Weekly Chart.
Overall, we see the Markets trading range bound and it is
not likely to show any runaway resumption of up move. Action is likely to remain limited to remain
highly sector specific and select pockets will show outperformance in the
Markets. We recommend not getting carried away with any sharp up move and use
all dips, if any, to make select purchases. Shorts should be avoided.
A study of Relative Rotation Graphs – RRG tells that ENERGY
stocks will now start showing relative out performance against the NIFTY. We
will also see continued out-performance in METAL Stocks. IT and PHARMA are
likely to struggle to consolidate and are expected to remain range bound in
coming week. Apart from this, we will see broader Indices like NIFTYJR, CNX100
to improve as well. Not much is expected from REALTY. BANKNIFTY is likely to
see loss of momentum and underperformance can be expected from MEDIA stocks.
Important Note: RRG™ charts show you the relative
strength and momentum for a group of stocks. In the above Chart, they show
relative performance as against NIFTY Index and should not be used directly as
buy or sell signals.
(Milan Vaishnav, CMT, is
Consultant Technical Analyst at Gemstone Equity Research & Advisory
Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
+91-98250-16331
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