Saturday, January 7, 2017

Tech View - WEEKLY MARKET OUTLOOK FOR JANUARY 09 THRU JANUARY 13, 2017

WEEKLY MARKET OUTLOOK FOR JANUARY 09 THRU JANUARY 13, 2017
With the Close of Friday’s session, the NIFTY ended the week with net gains of 58 points or  0.71% on Week-on-week basis. In our previous weekly note, we had mentioned that we expect the Markets to consolidate with positive bias. The trend for the previous week remained on the analyzed lines. The NIFTY consolidated while continuing to resist at its 200-DMA at Close levels on the Daily Charts. However, it did give a higher top and higher bottom on the Weekly bar Charts, and continued to consolidate as well. Beginning this week, we expect a stable and positive start to the Markets but at the same time, we also expect the NIFTY to continue to consolidate and the levels of 8250 will remain critical to watch for on Weekly bias as it has slight potential to create resistance.

For the coming week, the NIFTY will find resistance at 8275 and 8380 levels and supports will come in at 8205 and 8150 levels.

The RSI—Relative Strength Index on the Weekly Chart is 48.0201 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD remains bearish as it trades below its signal line. However, it has flattened out and has started to move up. On the Candles, a spinning top  occurred. This is typically a sign of either indecisive trade which often is the result of some overall consolidation on  Weekly basis.

The pattern analysis throws an optimistic picture. It  did show that the bottoms at 7900-7920 has been formed. The NIFTY maintained its Close inside the lower Bollinger Band on the Weekly Charts. Further, as mentioned in our previous weekly note, this level also signified a 50% retracement of the total rise from 6900-8968 levels. The NIFTY has formed a base around this zone of 7900-7920 and has attempted to move up. The overall reading is that the NIFTY has certainly formed a immediate bottom around these levels but it is yet to confirm his bottom and confirm a subsequent reversal. No structural breach on the pattern or the lead indicators is observed as of today.

Overall, like previous week, we expect the NIFTY to maintain a positive bias and consolidate. The levels of 8250-8275 zones will be critical to watch out for on Weekly basis. Further, it would be also important to see that the NIFTY moves past and closes above  its 200-DMA on a Daily note. Once done, it will lay impetus to the NIFTY’s attempt to confirm this bottom. We continue to reiterate to make select purchases with any dip and focus on some sectoral rotation that is quite evidently seen.

A study of Relative Rotation Graphs – RRG suggest just like previous week, ENERGY and METAL will continue to relatively outperform the overall Markets but will be seen losing some momentum as well. CNXIT – though it under-performed against expectations in the previous week giving knee-jerk reaction to the negative news flows, it is likely that it once again consolidate its performance and attempt to further improve. FMCG and select PHARMA will continue to display some relative strength. AUTO too would attempt to improve its relative performance. Some key components from NIFTYMID50 and PSUBANKS might distinctly underperform this week.

 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 



Friday, January 6, 2017

Daily Market Trend Guide -- Friday, January 06, 2017

MARKET TREND FOR FRIDAY, JANUARY 06, 2017
Precisely on the analyzed lines, the NIFTY resumed its up move after three days of consolidation and tested its 200-DMA which stands at 8275 and closed a notch below that. We had mentioned in our previous edition that post 300-odd points of rise given the consolidation of three days, the Markets has been displaying underlying strength. Today, we fairly expect the up move to continue with the NIFTY expected to open on a modestly positive note. The behavior of the NIFTY vis-à-vis the levels of 8275 will be important to determine if the Markets consolidate once again or continues with its up move. The latter is more likely as supported by all relevant indicators.

For today, the levels of 8315 and 8365 will act as immediate resistance levels for the Markets. The supports come in at 8235 and 8205 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.6557 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD is firmly bullish as it trades above its signal line. On the Candles, a rising window has occurred. This is usually a gap up and this often signals continuation of the uptrend on the following day.

Looking at derivative figures is encouraging. The NIFTY January futures have added yet another over 12.44 lakh shares or 7.10% in Open Interest. This signifies that the previous up move has occurred with support of fresh buying and addition of longs.

Pattern analysis also draws encouraging picture. The NIFTY had confirmed a Double Bottom support in the 7900-7920 zones and after pulling back from those levels, it had reached the upper area resistance of the broad trading range that it had formed. Yesterday’s up move has shown an attempt by NIFTY to break out of that trading range. It will have to move past and close above 8275 or its 200-DMA in order to make a sustainable up move.

Overall, the only factor that raises some possibilities of the NIFTY consolidating once again is the fact that it is yet to move past and Close above its 200-DMA which is 8275 today. Once this happens, we will see some more sustained up move in the Markets. Until this happens i.e. until NIFTY moves past and closes above the 200-DMA, theoretically there are still some chances of some more consolidation but that would once again remain in form of intermittent bouts. We continue to advise positive outlook and recommend select buying in event of any intermittent consolidation as undercurrent remains distinctly buoyant.

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 

Thursday, January 5, 2017

Daily Market Trend Guide -- Thursday, January 05, 2017

MARKET TREND FOR THURSDAY, JANUARY 05, 2017
Classical consolidation continued in the Indian Equities as the NIFTY remained in a very narrow range and ended the third day in a row on a flat note. It ended with marginal loss of 1.5 points or 0.02%. Today’s session is likely to remain on similar lines. We are likely to see a modestly positive start to the Markets and the analysis for today, therefore, remains on similar lines. The NIFTY has been resisting to its 50-DMA. Therefore, 50-DMA which stands at 8216 and 200-DMA which stands at 8271 remain critical levels to watch for in coming days.

For today, the levels of 8220 and 8270 will remain resistance levels for the NIFTY. The supports are likely to come in at 8135 and 8105 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.0082 and this remains neutral as no bullish or bearish divergence are seen. It does not show any failure swings either. The Daily MACD is bullish as it trades above its signal line. On the Candles, no significant formations are seen.

On the derivative front, the NIFTY has added yet another 2.99 lakh shares or 1.74% in Open Interest. While the NIFTY is consolidating, it is adding net OI which is a positive sign.

The pattern analysis suggest a clear formation of the trading range post the Markets taking support in the 7900-7920 zones. It took support twice near these levels forming a Double 
Bottom support and it now trades currently on the higher side of the established trading range. As of now, it trades below its 50-DMA and 200-DMA and until the NIFTY trades below this level, it is likely to remain under consolidation. For a fresh sustainable up move to occur, NIFTY will have to move past these important pattern resistances.

It is important to note that after the pullback of nearly 300-odd points, the NIFTY has not shown any retracement and is ending on a flat note at Close levels. This is clear indication of inherently positive bias in the Markets. However, until the Markets moves past the mentioned critical levels, we might see it continue to consolidate in broad range. However, the downsides will remain absolutely limited but some amount of volatility will remain ingrained. All lead indicators, F&O data and the current structure of the Charts point towards positive bias.

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 

Wednesday, January 4, 2017

Daily Market Trend Guide -- Wednesday, January 04, 2017

MARKET TREND FOR WEDNESDAY, JANUARY 04, 2017
Much as expected, the Indian Equities continued to consolidate on the Daily Charts and ended yet another day on a flat note ending with nominal gains of 12.75 points or 0.16%. The Markets continued to display inherent strength as it came off its intraday lows, while also resisted to its prescribed levels. Today, we once again expect a flat to positive start. At the same time, we still do not expect a runaway up move in the NIFTY and expect the consolidation to continue but with a positive bias. The level of 200-DMA which is 8268 today will remain the key level to watch out for. Until the NIFTY moves past this level, we will continue to see range bound consolidation in the Markets.

For today, the levels of 8220 and 8270 will act as immediate resistance levels for the Markets. The supports come in at 8150 and 8115 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.1561 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD is bullish as it trades above its signal line. On the Candles, a spinning top has occurred. This indicates indecisiveness but at the same time, the overall pattern of the Charts exhibits some amount of healthy consolidation.

On the derivative front, the NIFTY January futures have added over 1.98 lakh shares or 1.17% in Open Interest.

If we have a look at pattern analysis, after forming a Double Bottom support in the zones of 7900-7920 levels, the NIFTY has formed a broad trading range with the levels of 8250-8275 zones acting as its upper pattern resistance. The zone of 8230-8270 also has 50-DMA and 200-DMA and both of these levels are likely to pose resistance at Close levels. Before we see any runaway rise, it would be critically important for the Markets to move past the 200-DMA. Until this happens, consolidation in a broad range will continue.

Overall, we should also note one important point that after a pullback of nearly 300-odd points, the NIFTY has not corrected at all at Close levels. While giving intraday swings, it has remained flat on Close levels. This is a clear sign of inherent strength in the Markets. Given the overall technical structure of the charts, reading the position and pattern of lead indicators, and taking some cues of F&O data, we can once again continue to fairly observe that though it may be a while before NIFTY gives a runaway rise, any consolidation will remain limited. Some consolidation might be there in form of intermittent downswings but inherent strength continues to remain intact.

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 

Tuesday, January 3, 2017

Daily Market Trend Guide -- Tuesday, January 03, 2017

MARKET TREND FOR TUESDAY, JANUARY 03, 2017
Quite on analyzed lines, the NIFTY consolidated today after four sessions and over 300-odd points of gains and ended the day with nominal loss of 6.30 points or 0.08%. In a way, the Markets have displayed great amount of strength at Close levels by not declining after robust gains over previous days. Today, we expect a stable start once again but at the same time, we expect the NIFTY to consolidate in a capped range. The 50 and 200-DMA of the Markets will continue to act as resistance and we will also see some volatility remaining ingrained in the Markets.

For today, the levels of 8065 and 8310 will act as immediate resistance levels for the Markets. The supports will come in at 8140 and 8105 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.2908 and it remains neutral as it shows no bullish or bearish divergence. No failure swings are seen as well. The Daily MACD stays bullish while trading above its signal line. On Candles, no significant formation is observed.

On the derivative front, the NIFTY January futures have shed 75,900 shares or 0.44% in Open Interest. The figure remains more or less unchanged and does not signify any major shift in the underlying sentiment.

Coming to pattern analysis, the NIFTY has reached the pattern resistance zone which lies just ahead of current levels. It has marked the 7900-7920 zones as a important major pattern supports and currently has reached the upper resistance zone of the broad trading range that the Markets have traded in last couple of months. In any given case, the 7900-7950 zone will act as major strong pattern supports and on the upside, the levels of 200-DMA will continue to act as important resistance levels for the Markets.

All and all, the NIFTY is expected to continue with its up move and logical levels of 200-DMA which stands at 8264 today can be tested today or in coming sessions. At the same time, we are all likely to witness sessions with low volumes and some good amount of volatility ingrained in it. This may lead to some consolidation and some intermittent profit taking bouts. However, given the overall structure of the Charts, reading of the lead indicators and the F&O data, we can fairly conclude that the underlying sentiment remains buoyant.

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 

Monday, January 2, 2017

Daily Market Trend Guide -- Monday, January 02, 2017

MARKET TREND FOR MONDAY, JANUARY 02, 2017
Equity Markets continued its uptick on Friday as the NIFTY posted yet another day of gains and ended the last trading day of the year 2016 with gains of 82.20 points or 1.01%. On Year-to-date basis, the NIFTY ended 2016 with net gains of 239.45 points or 3.01% grossly under-performing its peers. Today, as we enter into the first trading day of 2017, we can once again expect a stable start to the Markets. We may see some positive trade, at least in the initial session and going ahead, today and in sessions to come, the levels of 8260 will remain extremely critical to watch out for. This is the place where in the NIFTY meets multiple pattern resistances. We can certainly expect some consolidation at around these levels.

For today, the levels of 8230 and 8260 will act as immediate resistance for the Markets. Supports will come in at 8145 and 8100 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.75.63 and it has reached its highest value in last 14-days which is Bullish. Also, RSI has set a fresh 14-period high whereas the NIFTY has not yet and this indicates Bullish Divergence. The Daily MACD is bullish as it trades above its signal line. On the Candles, a Rising Window occurred. It is a gap on the upper side and this signals potential continuation of the uptrend.

On the derivative front, the NIFTY January futures have added yet another 9.64 lakh shares or 5.97% in Open Interest.

Coming to pattern analysis, the NIFTY has re-established the 7900-7920 zones as its important pattern support. After bouncing off from those lows, the NIFTY took support once again forming a Double Bottom formation. It validated this formation as it bounced back nearly 300-odd points from there. As of now, this level now reinforces itself as its important pattern support. We expect the NIFTY to logically move towards 200-DMA which rests at 8260 today.

Overall, while not ignoring the fact that the NIFTY has seen some 300-odd points of rise in last four sessions, some possibilities of consolidation happening at higher levels certainly exists. However, the other factors, such as the F&O data, the lead indicators and its structure and the overall pattern analysis indicate continuation of uptrend. So, whatever consolidation that we may see going ahead, will be expected to be in form intermittent profit taking bouts. We continue to maintain positive outlook on the Markets.

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