WEEKLY MARKET OUTLOOK FOR SEP 18 THRU SEP 22, 2017
The Indian Equities ended the Week on a positive note as the
benchmark NIFTY50 Index gained 150.60 points on Weekly basis. Having said this,
though the NIFTY ended the week gaining 1.52%, the last two days of the Week
that has gone by were spent by the Markets consolidating in a very narrow
range. Though the set up looks positive, we expect that the consolidation that
we saw on the last two days of the week is likely to get spilled over into
coming week as well. The levels of 10130-10150 will act as stiff resistance to
the Markets initially in the coming week. Beyond this, the Markets may test new
highs.
The levels of 10150 and 10265 will act as immediate
resistance over coming week. Supports come in lower at 10010 and 9930 zones.
The Relative Strength Index – RSI on the Weekly Chart is
69.1107. The NIFTY has marked a fresh 14-period high but RSI has not and
therefore this has resulted into Bearish Divergence. The Daily MACD continues
to remain bearish while trading below its signal line. No significant formations
were observed on Candles.
The pattern analysis show that the NIFTY is currently
trading in a narrow band but stays well within the 18-month long upward rising
channel that it has formed. It is tracking the upper Bollinger band and stays
in the upper range of the channel.
Overall, we cannot rule out the possibility of the NIFTY
testing fresh highs in the coming week. However, in the same breath, we do not
see NIFTY making significant advancements on the upper side also. The clear
evidences of fatigue on the lead indicators, much higher NIFTY PCR (Put to Call
Ratio), and VIX remaining at its lowest in recent times is likely to put a
check and prevent any runaway rise in the Markets. The Week is likely to remain
highly stock specific and therefore we recommend remaining highly selective in
picking stocks. While vigilantly protecting profits at higher levels, cautious
outlook is advised for the coming week.
A study of Relative Rotation Graphs – RRG show that in the
coming week, we will see stocks from broader indices like NIFTY JR (Nifty Next
50), CNXMIDCAP100, will see sharp
relative outperformance against NIFTY. The Energy and Metal Stocks also likely
to continue to relatively outperform the Markets. On the other hand, we will
see substantial improvement of performance from PSU Banks and select Private
Banks along with IT. No major outperformance is expected from Auto. REALTY,
along with FMCG and Pharma will continue to lag and remain weak on a weekly
basis.
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, MSTA is
Consultant Technical Analyst at Gemstone Equity Research & Advisory
Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia
Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
CMT Association (Formerly Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts, STA (UK)
+91-70164-32277 / +91-98250-16331
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