Saturday, September 23, 2017

WEEKLY MARKET OUTLOOK FOR SEP 25 THRU SEP 29, 2017

WEEKLY MARKET OUTLOOK FOR SEP 25 THRU SEP 29, 2017
All throughout previous Week, we kept on sounding alert signs on the possibility of the NIFTY seeing sharp corrective movements and chances of not sustaining the fresh highs that the benchmark NIFTY50 was trying to mark. Very much in line with this analysis, not only did the Index retraced from its high levels but also ended the week on a negative note losing 121 points or 1.20% on a Weekly basis. In all probability, Markets have marked the levels of 10180 as its temporary top and it will take a while before the Markets take out those levels on the upside. However, the primary uptrend remains intact.

The coming week will see the levels of 10150 and 10235 playing out as immediate resistance levels for the Markets. Supports come in at 9890 and 9810 zones.

The Relative Strength Index – RSI on the Weekly Chart is 63.3218 and it remains neutral showing no divergence against the price. The Weekly MACD is bearish as it currently trades below its signal line. On the Candles, an Engulfing Bearish Pattern has occurred. This is very much likely to have bearish implications as it has occurred during an uptrend. It has a potential to temporarily halt the up move.

The pattern analysis show that the NIFTY continues to trade well within the upward rising channel formed over last 18-months. However, it has some room for retracement and even with coming off from current levels; there won’t be any technical breach on the Charts.

It is important to note that though we may cite any reason for the previous week’s decline, this retracement and halting of up move was very much because of technical nature. The NIFTY PCR (Put to Call Ratio) was at recent highs and the VIX traded at all time low. Technical correction was imminent. We expect a subdued start to the expiry week on Monday and continue to maintain cautious and stock specific approach to the Markets as we see that even with the primary trend remaining intact, some corrective activities may continue.

A study of Relative Rotation Graphs – RRG show that in the coming week, we expect that IT Stocks are likely to take lead and relatively out-perform the broader Markets. Metals are showing signs of tiredness and are expected to show some slowdown and consolidate. REALTY and FMCG stocks are not expected to put up and good show as well. We will see PHARMA consolidating and select out-performance coming in from MEDIA, PSUBANKS , NIFTY Junior and Infra stocks.

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, 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 



Friday, September 22, 2017

MARKET OUTLOOK FOR FRIDAY, SEP 22, 2017

 MARKET OUTLOOK FOR FRIDAY, SEP 22, 2017
We had mentioned about possibility of a sharp move by the benchmark NIFTY50 on either side in our yesterday’s note. On Thursday, the Markets saw a  sharp volatile selling bout from the higher levels while the NIFTY ended the day with net loss of 19.25 points or 0.19%. Important thing that was observed was the reduction / shrinkage of NIFTY Futures premium which came along with reduction in Open Interest. This very much implies that a section of the Market participants which were evenly poised are losing patience in a heavily range bound Markets.

The levels of 10170 and 10230 will continue to act as major resistance levels for the Markets. Supports come in at 10065 and 9980 levels.

The Relative Strength Index—RSI on the Daily Chart is 62.5274 and it continues to remain neutral against the price showing no divergences on either side. The Daily MACD still remains bullish but it has started to contract its trajectory. On the Candles, a Candle with a long lower shadow closely resembling a hanging man has occurred. This is a signal that the current up move may get interrupted for immediate short term and such formations also sometime marks a temporary top for the Markets.

All and all, Markets are throwing up certain signs that we cannot ignore. After failing to comprehensively move past the 10130-10150 mark, the lead indicators seem to be losing momentum. Further, the shrinkage of futures premium coming with reduction in Open Interest also point towards minor unwinding at higher levels. As of today, the Markets have marked a range of 9995-10180 for itself in the near term. In absence of any significant triggers, we can fairly expect the Markets to continue trading in this broad range. We recommend maintaining cautious stock specific approach is advised for the day.

Milan Vaishnav, CMT, MSTA
Technical Analyst 
(Research Analyst, SEBI Reg. No. INH000003341)


Member: 
CMT Association (Formerly known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK  


+91- 70164-32277  /  +91-98250-16331  

Thursday, September 21, 2017

MARKET OUTLOOK FOR THURSDAY, SEP 21, 2017

 MARKET OUTLOOK FOR THURSDAY, SEP 21, 2017
The Indian Equity Markets on Wednesday remained quite directionless and while trading much on the expected lines, continued to consolidate and trade in a much capped range. The benchmark NIFTY50 ended the day with minor losses of 6.40 points or 0.06%. On Thursday, we expect the Markets to go into on a steady not while also giving reactions to the ending of the FOMC meet. In any case, the zones of 10150-10170 will continue to pose resistance. The smaller intraday bands that are being witnessed in couple of past previous trading sessions show the Markets lack of directional bias and also show that the Markets are poised evenly and can go either way.

Thursday will see the levels of 10170 and 10230 playing out as resistance levels. Supports 
come in at 10090 and 9980 zones.

The Relative Strength Index – RSI on the Daily Chart is 64.8543 and stays neutral showing no divergences. The Daily MACD continues to remain bullish.

The Markets continued to track the upper Bollinger band while trading in the rising channel that the Markets have formed during last couple of days.

Overall, with the Markets continuing to trade in very narrow intraday bands, there are chances that we see sharp movements either side. Also, with no directional bias over past couple of session, we strongly recommend keeping over exposures to moderate levels. Shorting should be avoided if there is a convincing breach of highs, short covering can occur. However, until a directional bias is established, stock specific approach is advised. Caution is advised for the day.

Milan Vaishnav, CMT, MSTA

Technical Analyst 
(Research Analyst, SEBI Reg. No. INH000003341)


Member: 

CMT Association (Formerly known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK  


+91- 70164-32277  /  +91-98250-16331  

Wednesday, September 20, 2017

MARKET OUTLOOK FOR WEDNESDAY, SEP 20, 2017

MARKET OUTLOOK FOR WEDNESDAY, SEP 20, 2017
Much on the expected lines, the benchmark NIFTY50 did not see any runaway rise despite a buoyant session a day before. The Markets on Tuesday saw the Index oscillating in a 25-point range while it ended flat with negligible loss of 5.55 points or 0.05%. On Wednesday, we expect the Markets to continue to consolidate and struggle to clear the immediate resistance zone of 10150-10170. Even if it does manage to mark new highs, it will continue to remain vulnerable to volatile profit taking bouts form higher levels. Going on, we will see more stock-specific Markets then a general trend.

The levels of 10170 and 10230 will continue to pose immediate resistance to the Markets. Supports come in at 10090 and 10025 levels.

The Relative Strength Index – RSI on the Daily Chart is 65.6080 and it stays neutral showing no divergences against the price. Daily MACD stays bullish while trading above its signal line. No significant formations were observed on Candles.

While the NIFTY continued to trade comfortably in the multi-month upward rising channel that it has formed over couple of days, the size of the bar is getting smaller due to reduced intraday bands. This often reflects indecisiveness among participants.

All in all, we feel that couple of sessions going ahead is more likely to remain stock-specific ones. Any runaway rise in the NIFTY is not expected. If the NIFTY moves past its recent highs and marks fresh highs, then the vulnerability of the Markets facing volatile profit taking bouts too will increase. We recommend continuing to adopt stock specific approach in the sessions to come while maintaining cautious view on the Markets. Shorts should be avoided as inherent trend remains intact.

Milan Vaishnav, CMT, MSTA
Technical Analyst 
(Research Analyst, SEBI Reg. No. INH000003341)


Member: 
CMT Association (Formerly known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK  


+91- 70164-32277  /  +91-98250-16331  

Tuesday, September 19, 2017

MARKET OUTLOOK FOR TUESDAY, SEP 19, 2017

MARKET OUTLOOK FOR TUESDAY, SEP 19, 2017
The Indian Equity Markets had a better-than-expected session on Monday as it opened strong and ended the day with net gains of 67.70 points or 0.67%. However, the benchmark NIFTY50 saw this up move on back of sharp short covering. Though we may expect a stable start to the Markets on Tuesday, there are ample signs that the Markets may not see a sustainable up move even if it continues to post intermittent lifetime highs. The zones of 10150-10170 still need to be comprehensively breached and while it happens, we cannot ignore the signs of weariness that are appearing on the Charts.

The levels of 10170 and 10265 will act as immediate resistance levels for the Markets. Supports come in at 10080 and 10010 levels.

The Relative Strength Index – RSI on the Daily Chart is 66.2278 and it has reached its highest value in last 14-days which is bullish. No divergence is seen against the price. The Daily MACD continues to stay bullish while trading above its signal line. A Rising Window” that occurred on the Candles may result into some continued up move on Tuesday.

The pattern analysis show the Market slowly inching up towards the upper zone of the rising channel that it has been trading in. The intraday bands are getting shorter as the NIFTY has remained in a very narrow intraday range over past couple of days.

There are few things that warrant our attention and requires the Market Participants to be cautious about. The NIFTY PCR (Put to Call Ratio) remains at its highest in recent times. The VIX remains at its lowest levels which signals high amount of complacency of the participants. Further, the previous up move has resulted out of a short covering as it has come with reduction in Open Interest. We recommend remaining extremely cautious and adopt stock specific outlook on the Markets.

Milan Vaishnav, CMT, MSTA
Technical Analyst 
(Research Analyst, SEBI Reg. No. INH000003341)


Member: 
CMT Association (Formerly known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK  


+91- 70164-32277  /  +91-98250-16331  

Monday, September 18, 2017

MARKET OUTLOOK FOR MONDAY, SEP 18, 2017

MARKET OUTLOOK FOR MONDAY, SEP 18, 2017
On Friday, the Indian Equity Markets continued to consolidate and ended virtually unchanged with the NIFTY ending the day with negligible loss of 1.20 points or 0.01%. In the previous Week, we have seen the Markets consolidating fiercely and remaining in extremely capped range. On Monday, we expect a quiet start and also expect the previous two days of consolidation to get spilled into the coming week as well. Monday is likely to see a range bound session once again with the zones of 10135-10150 continuing to offer serious resistance to the Markets.

Monday will see the levels of 10135 and 10190 playing out as serious resistance levels for the Markets. Supports come in at 10020 and 9960 levels.

The Relative Strength Index – RSI on the Daily Chart is 62.1810 and remains neutral showing no divergences against the price. The Daily MACD stays bullish but it has flattened its trajectory. No significant formations were observed on Candles.

The pattern analysis shows that the NIFTY continues to trade in the upward rising channel that it has formed over past couple of months. It is continuing to track the upper Bollinger band and hovers within very short distance of its lifetime highs.

Overall, with the Markets trading above all of its moving averages, there is no reason to fear or expect any serious downsides from these levels as of now. However, we cannot ignore some evident fatigue on the lead indicators coupled with relatively high NIFTY PCRR (Put to Call Ratio). These factors are either likely to keep the Markets under check or prevent any immediate meaningful upsides from current levels. We expect volatile range bound consolidation to continue and recommend cautiously positive outlook on the Markets for the day.

Milan Vaishnav, CMT, MSTA
Technical Analyst 
(Research Analyst, SEBI Reg. No. INH000003341)


Member: 
CMT Association (Formerly known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK  


+91- 70164-32277  /  +91-98250-16331  

Sunday, September 17, 2017

WEEKLY MARKET OUTLOOK FOR SEP 18 THRU SEP 22, 2017

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