Saturday, June 3, 2017

WEEKLY MARKET OUTLOOK FOR JUNE 05 THRU JUN 09, 2017

WEEKLY MARKET OUTLOOK FOR JUNE 05 THRU JUN 09, 2017
In line with the analysis carried out in our previous Weekly Note, the benchmark NIFTY50 did not make any major headway as it ended the week with net gains of 58.40 points or 0.61%. It is important to note that the Markets have displayed steadfast buoyancy in the week that has gone by. In the coming week as well, we will see the Markets attempting to mark fresh highs but at the same time, we would prefer to remain cautious at any moment, the Markets may be subjected to some very short term corrective action given the overbought nature of the Markets.

For the coming week, the levels of 9690 and 9780 are the likely resistance levels. The supports come in much lower at 9550 and 9510 zones.

The Weekly Relative Strength Index – RSI is 76.9547. Although it is bullish as it has marked a fresh 14-period high, it trades in “overbought” territory. The Weekly MACD is bullish but it also now trades in “overbought” territory.

The pattern analysis very visibly shows a breakout from a Inverted Head & Shoulder formation remaining perfectly in force. However, given the overbought nature of the lead indicators, it also point towards some impending very short corrective action that can happen any time.

There is no disputing the fact that the Markets are displaying state of steadfast buoyancy. However, we cannot ignore that fact that the Markets currently is overbought on all possible lead indicators and this makes some onset of corrective activity very much imminent and long overdue. Such consolidation may happen in the form of sideways range bound movements coupled with sharp bouts of profit taking from higher levels. We reiterate keeping exposures moderate and stock specific and adopt caution for the week coming ahead.

A study of Relative Rotation Graphs – RRG show that though select pocket of REALTY Stocks will show relative out-performance, the overall momentum is likely to slow down. We will see PHARMA, IT and METAL not making any major headway but will just continue to consolidate its performance in coming week. The ENERGY and MEDIA pack too is likely to relatively under-perform.  We expect PRIVATE BANKS, FINANCIAL SERVICES Stocks, and FMCG coupled with select AUTO stocks relatively outperforming in the coming 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, June 2, 2017

MARKET OUTLOOK FOR FRIDAY, JUNE 02, 2017

MARKET OUTLOOK FOR FRIDAY, JUNE 02, 2017
We had mentioned in our Thursday’s note that we expect the level of 9650 to act as immediate top for the Markets. In line with these projections, the Markets on Thursday continued with consolidation while resisting to the defined zone. The benchmark NIFTY50 ended the day with negligible loss of 5.15 points or 0.05%. We expect a tepid start to the Markets on Friday and expect the level of 9650 to continue to act as immediate resistance level. In event of any runaway rise, the Markets will remain vulnerable to volatile profit taking bouts from higher levels.

The levels of 9650 and 9680 are immediate resistance levels for the Markets. The supports come in at 9570 and 9530 zones.

The Relative Strength Index – RSI on the Daily Chart is 68.7940 and it remains neutral showing no divergences against the price. The Daily MACD is still bullish while it trades above the signal line. No major formations were observed on Candles.

The pattern analysis shows that NIFTY continues to hang on above the upper rising trend line that was drawn from 9200 level. The Markets attempted a breach above this trend line but it is yet to achieve a clear breakout.

All and all, the lead indicators continue to show the Markets turning weary at higher levels. We expect some minor corrective activity to happen. Such corrective activity may be in form of range bound oscillations or some very limited downsides but such activity remain imminent and sooner they happen they will be healthy for the Markets. Until this happen, stock specific approach should be maintained and aggressive exposure should be avoided.

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, June 1, 2017

MARKET OUTLOOK FOR THURSDAY, JUNE 01, 2017

MARKET OUTLOOK FOR THURSDAY, JUNE 01, 2017
Indian Equity Markets continued to scale fresh but ended the day with minor loss of 3.30 points or 0.03% as the benchmark NIFTY50 continued to fiercely consolidate. In all likelihood, the NIFTY has marked a temporary top a 9649 levels as the signs of tiredness and fatigue are clearly evident. A quiet opening is expected on Thursday. Though the NIFTY has continued to pile up open interest, some minor corrective action now seems imminent and overdue.

The levels of 9650 and 9680 will act as resistance while supports come in at 9570 and 9540 zones.

The Relative Strength Index – RSI on the Daily Charts stands at 69.4968 and it remains neutral showing no divergences against the price. The Daily MACD stays bullish while trading above its signal line. No significant formation was observed on Candles.

The pattern analysis shows the NIFTY hanging on above the rising trend line that it attempted to break on the upside. In event of any minor consolidation, this level is likely to act as minor support.

All and all, there are chances that we witness some minor corrective activity in the Markets. The underlying current remains strong and there is no second opinion on it. However, in order to get these up move healthy and sustainable, some minor corrective action seems imminent and long overdue. We recommend using all upsides from here to protect profits as all such up moves will remain vulnerable to profit taking bouts.

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, May 31, 2017

MARKET OUTLOOK FOR WEDNESDAY, MAY 31, 2017

MARKET OUTLOOK FOR WEDNESDAY, MAY 31, 2017
Positive consolidation continued in the Indian Markets as the benchmark NIFTY scaled yet another fresh lifetime high while it once again ended the day with nominal gains of 19.65 points or 0.20%. While acknowledging the fact that the primary trend is strongly intact, the Markets seem little overstretched and some minor corrective activity can be expected. We expect a quiet start to the Markets on Wednesday and would expect some range bound corrective activity to happen. Unless this happens, the Markets will remain vulnerable to selling bouts from higher levels now on.

The levels of 9650 and 9680 will act as immediate resistance zone.  The supports come in lower at 9550 and 9530 levels.

The Relative Strength Index – RSI on the Daily Chart is 69.8782 and it is nearly overbought. Bearish divergence is evident as the NIFTY scaled a fresh 14-period high while the RSI did not. The Daily MACD is bullish while it trades above its signal line.

While having a look at pattern analysis, the NIFTY rests above the rising trend line drawn from 9200 levels. It has attempted to achieve a breakout from this trend line. However, given the overstretched lead indicators, some minor corrective activity cannot be ruled out.

While we do not dispute the underlying strong buoyancy in the Markets, it would be equally important for the Markets to see minor corrective activities. Though it may not show any significant decline, some range bound movements with bouts of profit taking from higher levels cannot be ruled out. The persistent bearish divergence on the Daily Charts along with the Markets being overbought on Stochastic is likely to put some brakes on momentum and may subject the Markets to a brief corrective action.

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, May 30, 2017

MARKET OUTLOOK FOR TUESDAY, MAY 30, 2017

MARKET OUTLOOK FOR TUESDAY, MAY 30, 2017
Despite pulling back nearly 200-odd points from the support zone of 9380-9400 zones, the Markets on Monday showed no signs of letting up as the benchmark NIFTY50 ended the day with nominal gains of 9.80 points or 0.10%. Though bearish divergence has continued to persist on lead indicators, the Index has continued to display good amount of strength. On Tuesday, we expect a quiet start and expect such range bound oscillations to continue. The persistent bearish divergences on the Daily Charts may cause the Markets to oscillate in a range.

The levels of 9640 and 9675 will act as immediate resistance levels. The supports come in at 9550 and 9510 zones.

The Relative Strength Index – RSI on the Daily Chart is 68.8661 and it continues to show Bearish Divergence. The RSI has not marked any fresh highs while the NIFTY has gone on to mark fresh 14-period high. The Daily MACD is bullish as it trades above its signal line.

The pattern analysis shows the Markets attempting to breakout above the rising trend line drawn from 9200 levels. Currently though the NIFTY stays above that trend line, the lead indicators that show tiredness remain cause of concern. It remains over bought on Stochastic as well.

Overall, we reiterate that the undercurrent in the Markets remain very much buoyant. Though the Markets are not overbought on Daily Chart, the persistent emergence of Bearish Divergence may keep NIFTY away from a runaway rise and force itself again in a brief period of consolidation.

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, May 29, 2017

MARKET OUTLOOK FOR MONDAY, MAY 29, 2017

MARKET OUTLOOK FOR MONDAY, MAY 29, 2017
After remaining under minor correction, the benchmark NIFTY50 not only successfully defended the important pattern support zone of 9380-9400 levels but also saw a sharp pullback. It went on to scale fresh highs while it ended the day on Friday with a decent gain of 85.35 points or 0.90%. Markets are now in uncharted territory once again and in a firm uptrend. However, on Monday, we may see Markets taking some breather after over 200-odd points of a technical pullback. Perhaps it is time again for the Markets to be in a ranged consolidation, move sideways and return to stock specific activity.

The levels of 9625 and 9655 might act as resistance levels for the day. The supports come in at 9570 an 9540 zones.

The Relative Strength Index – RSI on the Daily Chart is 68.3740 and it shows no failure swing. However, a Bearish Divergence has emerged as the NIFTY marked a fresh 14-period high while the RSI did not. The Daily MACD is bullish after reporting a positive crossover.

The pattern analysis shows that the Markets are attempting to achieve a clear breakout from the rising trend line drawn from 9200 levels. The rising nature of the trend line has so far prevented the Markets from a clear breakout.

All and all, it is beyond doubt that the Markets are buoyant and the undercurrent that is exhibited is extremely bullish. While the Markets attempt to scale fresh high, it is very likely that it takes some breather and consolidates once again within a defined range. While there will be no major downsides, some sideways movement within a range with some volatility cannot be ruled out.

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 

WEEKLY MARKET OUTLOOK FOR MAY 29 THRU JUN 02, 2017

WEEKLY MARKET OUTLOOK FOR MAY 29 THRU JUN 02, 2017
In our previous weekly note, we had expected this week to remain dominated with rollover centric activities. There were accumulated shorts in the Markets and it had a stronger-than-expected effect on the Markets. The benchmark NIFTY50 which was net negative for the week, turned the tables down, and ended this week with net gains of 167.20 points or 1.77% on weekly basis. Though the Markets remain strong, the coming week will some momentum tapering off and taking some breather. The art would lie in picking stock specific action to extract gains as Markets may take some breather without losing any significant ground.

The Markets are in uncharted territory once again and the levels of 9620 and 9735 may pose potential resistance. Supports come in lower at 9605 and 9530 zones.

The Relative Strength Index – RSI on the Weekly Chart is 75.8654. Though it trades in overbought zone, it has marked a fresh 14-period high and it is bullish. The Weekly MACD trades above its signal line and it is bullish as well.

The Pattern analysis shows the Inverted Head & Shoulder pattern that developed on the Weekly Charts remain perfectly in place. The Markets have successfully broken out of that pattern and has continued it’s up move without showing any significant retracement.

Overall, the Markets are overbought on Weekly Charts. However, being overbought is no reason to sell and on the contrary, it exhibits underlying strength in the Markets. We may see Markets remaining range bound for some time moving sideways in a defined trajectory with minor declines but in any sense, it is all likely to keep its primary trend intact.

A study of Relative Rotation Graphs – RRG show that REALTY stock will continue to outperform but may slow down so far as momentum is concerned. We will continue to see outperformance from NIFTYJR, PSUBANKS. Select INFRA Stock will be seen getting stronger. PHARMA has suddenly lost momentum and it is not likely to make any meaningful gateway this week. AUTO will continue to outperform. METAL stocks too seem to be preparing for some long term up move. IT is likely to take some breather after the recent pullback but that too, just like METALS is consolidating its space. No outperformance is expected from MEDIA and ENERGY stock.

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 




MARKET OUTLOOK FOR FRIDAY, MAY 26, 2017

MARKET OUTLOOK FOR FRIDAY, MAY 26, 2017
In our Thursday’s note, we had mentioned about the existence of short positions. The benchmark NIFTY50 saw a huge relief rally primarily fuelled by short covering and supported by some fresh buying as well as the NIFTY50 ended the day with strong gains of 149.20 points or 1.59%. The zone of 9380-9420 has once again re-established itself as a strong intermediate support zone. Though we expect a quiet start tomorrow, we will now see Markets consolidating once again near the rising trend line as a clean breakout is yet to take place.

The levels of 9525 and 9580 will act as immediate resistance levels while supports will come in at 9470 and 9430 zones.

The Relative Strength Index – RSI on the Daily Chart is 63.2407 and remains neutral showing no divergence against the price. The Daily MACD still remain bearish while it trades below its signal line. A big white candle occurred. The importance of the formation is that this big candle has occurred near the support zone. This has re-established the credibility of the support zones of 9380-9420.

The pattern analysis shows the Markets bouncing back from the support zone of 9380-9420 and again resisting to the rising trend line drawn from 9200 levels. The rising nature of the trend line is helping NIFTY form fresh highs but it is still keeping it away from  achieving clean breakout.

All and all, despite Thursday pullback, a clear breakout is yet to be achieved. Until the NIFTY achieves such breakout, it remains prone to consolidation once again. We reiterate avoiding shorts at any higher levels and contrary to this, utilize the consolidation, if any, to make select purchases.

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