Friday, July 7, 2017

MARKET OUTLOOK FOR FRIDAY, JULY 07, 2017

MARKET OUTLOOK FOR FRIDAY, JULY 07, 2017
In our previous note, we had mentioned about the possibilities of the Markets testing 9700-mark. In line with this analysis, the NIFTY tested these levels while ending the day with net gains of 36.95 points or 0.38%. In the process of testing the 9700-mark, NIFTY also reacted from these levels as these happen to be a pattern area resistance for the Markets. On Friday, we expect a tepid start and also expect  the Markets into some consolidation once again and see minor corrective activities.

Friday will see the levels of 9680 and 9710 playing out as important resistance levels. Supports will come in at 9630 and 9585 zones.

The Relative Strength Index – RSI on the Daily Chart is 62.2610. A bearish divergence is observed on NIFTY as the NIFTY has marked a fresh 14-period high while the RSI did not. Daily MACD continues to remain bearish while trading below its signal line.

Pattern analysis clearly suggests that the Markets will continue to face pattern resistance in the 9700-9735 zones in coming days. The Markets had breached a rising trend line on the downside and while on its move up, this very trend line is now acting out as resistance. Given the rising nature of this trend line, NIFTY will find it difficult to post a clear breakout soon.

Overall, some signs are evident on the Charts that suggest that the momentum in NIFTY is likely to taper down. Markets remain overbought on Stochastic, while showing a bearish divergence on the lead indicator. F&O data also suggest some minor consolidation of profit taking may occur though select outperformance in stock will continue. It is advised to vigilantly protect profits at current levels.

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, July 6, 2017

MARKET OUTLOOK FOR THURSDAY, JUNE 06, 2017

MARKET OUTLOOK FOR THURSDAY, JUNE 06, 2017
Though the Markets had a cautious session on Wednesday, the benchmark NIFTY50 went on to post modest gains while it ended with net gains of 24.30 points or 0.25%. We expect a modestly positive opening on Thursday, and further expect the Markets to post cautious upticks in prices in next coming days. However, cautious mood will prevail under any given circumstance. We expect the Markets to test 9700-mark if the levels of 9650 are crosses but it would be a while before a significant breakouts are achieved.

Thursday will see the levels of 9650 and 9700 marking important resistance levels for the Markets. The supports come in at 9605 and 9550 levels.

The Relative Strength Index – RSI on the Daily Chart is 58.8352 and it continues to stay neutral showing no divergences. The Daily MACD remains bearish while continuing to trade below its signal line. No significant observations were seen on Candles.

Pattern analysis shows the Markets likely to inch up but on the upside may resist the rising trend line that it breached on the downside. This trend line is likely to act as resistance on the way up but given the rising nature of this trend line, the likely pattern resistance levels too will keep shifting themselves higher.

Overall, if we have a minute look at the overall structure, two things become evident. First, the Markets have attempted to form a good base around its 50-DMA and second; if we visually examine the patterns of the lead indicators, they are showing upward inclinations as well. So, overall, though on a cautious note and with each rise remaining vulnerable to some volatility, Markets may continue to post modest upticks.

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, July 5, 2017

MARKET OUTLOOK FOR WEDNESDAY, JUNE 05, 2017

MARKET OUTLOOK FOR WEDNESDAY, JUNE 05, 2017
After posting a decent rise on Monday, the Markets continued to positively consolidate on Tuesday as the benchmark NIFTY50 oscillated in a narrow range and finally ended the day with negligible loss of 1.70 points or 0.02%. We expect a positive start to the Markets and the F&O data suggest that a good base has been built around 50-DMA and there are chances that we see the Markets attempting some up move in coming days. In event of any consolidation, the level of 50-DMA will continue to act as major important short term support.

Wednesday will see the levels of 9630 and 9685 acting as important resistance levels for the Markets. Supports will come in at 9500 and 9465 levels.

The Relative Strength Index – RSI on the Daily Chart is 56.4194 and it stays neutral showing no divergences. The Daily MACD still continue to remain bearish as it trades below its signal line.                

The pattern analysis shows the NIFTY attempting to find a good support and base around the 50-DMA levels. Though it still continues to trade well below the rising trend line that acted as its support earlier, the Markets still have some room on the upside given the rising nature of the potential pattern resistance levels.

The adding of the OI in the NIFTY July futures by over 4.05 lakh shares or 2.05% show some good base building up around current levels.
Overall, the NIFTY has still managed to end a notch above 20-DMA which is a very short term pattern support. Given the structure of the Charts, there are chances that the Markets may attempt some upward revision in prices. Though there may still be some profit taking at higher levels preventing a runaway rise, we will clearly going to see sectoral out performance in 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 

Tuesday, July 4, 2017

MARKET OUTLOOK FOR TUESDAY, JUNE 04, 2017

MARKET OUTLOOK FOR TUESDAY, JUNE 04, 2017
The Markets had a much robust-than-expected session as the benchmark NIFTY50 opened higher and strengthened further to end the day on a strong note gaining 94.10 points or 0.99%. Monday’s session remained significant in many ways. Firstly, much as indicated in our previous note, it reinforced the levels around 50-DMA as important support area. We expect some more follow through buying to continue on Tuesday and we can expect some positive bias in the Markets though still on a cautious note.

Tuesday will see the levels of 9635 and 9680 acting as resistance levels while supports will come in at 9650 and 9490 zones.

The Relative Strength Index – RSI on the Daily Chart is 56.6354 and it remains neutral showing no divergence against the price. The Daily MACD still stays bearish while trading below its signal line. On the Candles, a rising window occurred. It is a gap and its occurring near the support area of 50-DMA holds significance and marks the 50-DMA as important immediate support.

All and all, the Markets have also ended a notch above its short term 20-DMA. It is likely that the uptick in prices should continue. The F&O data also suggest sharp short covering took place at levels near 50-DMA and then it was followed by fresh buying on Monday’s session. This increases the possibility of the Markets inching bit higher again. Overall, we can expect select pockets of outperformance to continue in Auto, FMCG, IT and Metal packs.

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, July 3, 2017

MARKET OUTLOOK FOR MONDAY, JUNE 03, 2017

MARKET OUTLOOK FOR MONDAY, JUNE 03, 2017
The Markets continued to remain volatile as the benchmark NIFTY50 drifted well below those crucial 50-DMA levels intraday. However, the Markets recovered and finally ended the day while posting modest gains of 16.80 points or 0.18%. The Markets still are not fully out of the woods but it has certainly created some base for itself around the 50-DMA levels but however, these levels continue to remain very critical to watch out for. We expect a quiet start to the Markets tomorrow and at the same time, do not see it drifting significantly below the 50-DMA mark.

While the levels of 9545 and 9580 will play out as important resistance levels for the Markets, the supports will come at 9480 and 9410 zones.

The Relative Strength Index – RSI on the Daily Chart is 46.0168 and it remains neutral showing no divergences against the price. The Daily MACD is still bearish while it trades below its signal line and has started to flatten its trajectory.

The pattern analysis show the Markets dipping below the important trend line support drawn from 9200-mark. However, as of now, the NIFTY has held to its important pattern support and the 50-DMA levels which stand at 9482. This level will act as a important near term pattern support for the Markets.

Overall, we see the Markets forming base in this zone but still yet to see confirmation on the Charts. However, there are chances that the Markets attempt some pullback from these levels. NIFTY trades oversold on Stochastic and some short covering that we saw on Friday show discomfort of participants at lower levels. Cautious optimism is advised for the day.

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 

Sunday, July 2, 2017

WEEKLY MARKET OUTLOOK FOR JULY 03 THRU JULY 07, 2017

WEEKLY MARKET OUTLOOK FOR JULY 03 THRU JULY 07, 2017
In our previous Weekly Note, we had expected the Markets to remain largely uneventful and in a defined range. The Markets ended the Week with a modest lost with the benchmark NIFTY50 ended with net loss of 54.05 points or 0.56% on Week-on-Week basis. Going ahead, given the overall technical structure of the Charts, we expect that the Markets will continue to remain in a broad trading range. Though it may not post major downsides but at the same time any runaway rise too is equally unlikely.

Coming week will see the levels of 9590 and 9685 acting as resistance area. The supports will come in at 9410 and 9375 zones.

The Relative Strength Index – RSI on the Weekly Chart is 67.8084. It has just moved below the overbought area and this is a bearish sign. The Weekly MACD is bullish while it trades above its signal line but it is explicitly moving towards reporting a positive crossover.

The pattern analysis just show Markets taking a breather after breaking out from 8900-8950 zones and marking the recent top at 9710 levels. It is likely that it continues to rest for a while by the time it gathers strength to move up again.

All and all, we expect the Markets to continue to trade with a cautious undertone. Some intermittent profit taking bouts are likely to occasionally occur and the levels of 50-DMA on Daily Charts will be important to watch out for. We reiterate to continue to have modest exposures while preserving more cash while maintaining cautious outlook on the Markets.

A study of Relative Rotation Graphs – RRG shows that just like previous week, all major broad sectors such as CNX100, 200, 500, NIFTYJR, PSUBANKS, ENERGY, INFRA, MEDIA, CNXMID, etc are distinctly weakening . We are also likely to see loss of momentum from BankNifty, REALTY and Financial Services Stock this week though they are expected to continue to relatively out-perform the NIFTY. We will see FMCG, Services and select AUTO Stocks out-perform. IT, METAL and Pharma are likely to post stock specific out-performance.

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