WEEKLY MARKET OUTLOOK FOR SEP 04 THRU SEP 08, 2017
Our previous Weekly note mentioned about the Markets not
seeing any major breakdown on the downside. As a matter of fact, the benchmark
NIFTY50 performed better and ended with gains of 117.35 points or 1.19% on
Weekly basis. The coming week has relatively better set up. Though we not see
NIFTY racing beyond its lifetime highs too soon, but we may certainly see it
testing its previous highs and making attempts to move past them. In event of
any consolidation once again, the downsides are likely to remain defined,
ranged and limited.
The coming Week will see the levels of 10060 and 10225
acting as potential resistance levels. Supports may be expected to come in at
9780 and 9685 zones.
The Relative Strength Index –RSI on the Weekly Chart is
67.4058 and it is neutral showing no divergences against the price. The Weekly
MACD is bearish while it trades below its signal line. A white body occurred on
Candles but in the present circumstance; do not show any significant
formations.
The pattern analysis of the NIFTY shows it trading in
trading comfortably in the 18-month rising channel. Though there is some
congestion at the present higher levels, the NIFTY continues to trade
comfortably above all of its Moving Averages.
All in all, we see the Markets trading with positive bias
through the coming week. Any downsides, if any, are likely to remain capped. We
also expected some volatility to remain ingrained in the Markets as if the
NIFTY tests its previous highs and attempts to move past them, we are also
likely to see some profit taking at higher levels and this is likely to induce
volatility at higher levels. We reiterate maintaining positive bias, continue
to making stock specific purchases and
also guard profits vigilantly at higher levels.
A study of Relative Rotation Graphs – RRG show METAL stocks
are likely to provide leadership in event of any up move. They will continue to
relatively outperform the NIFTY in coming week and are likely to get company
from ENERGY stocks as well. Relative Out performance is also expected from
broader Indices like NIFTY JR (NIFTY Next 50) and CNX100. We will see IT and
PHARMA continuing to consolidate. No major out-performance is expected from
FMCG, REALTY, and AUTO. REALTY, PSUBANKS
and INFRA stocks are expected to improve their relative out-performance and
consolidate.
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:
CMT Association (Formerly Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Associate International Member:
Society of Technical Analysts, STA (UK)
+91-70164-32277 / +91-98250-16331
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