Saturday, September 30, 2017

WEEKLY MARKET OUTLOOK FOR OCT 02 THRU OCT 06, 2017

WEEKLY MARKET OUTLOOK FOR OCT 02 THRU OCT 06, 2017
In our previous Weekly note, we had mentioned about the possibility of the NIFTY marking the levels of 10178.95 as its temporary top. We had also expected the benchmark to maintain a corrective bias not it not making any meaningful headway. On the Weekly basis, the NIFTY50 has ended the week with net loss of 175.80 points or 1.76%. We have a shortened trading week coming up with Monday being a trading holiday. In the coming Week, we see the benchmark trading in a defined range not making much headway on the upside. The coming week might also remain volatile and the levels of 9685 will be critically watched.

The next week will see the levels of 9900 and 9990 playing out as resistance levels. Supports come in at 9685 and 9610 zones. The coming week with see a ranged oscillations within this defined range, while still keeping the current primary trend intact.

The Relative Strength Index – RSI on the Weekly Chart is 55.9844 and it has reached its lowest value in last 14-periods which is bearish. The Weekly RSI has set a fresh 14-period low while the NIFTY has not and this is Bearish Divergence. Weekly MACD continues to below its signal line.

The pattern analysis show that the NIFTY continues to trade in the 18-month upward rising channel that it has formed. Speaking on the broader lines, it has tested its 20-period moving average and breaching this level on the downside might bring in some weakness. Weekly VIX still remain relatively calm at lower levels which remain a cause of concern.

Overall, the overall texture of the Markets suggests that it is likely to continue to trade in a broad defined range. Though we maintain that so long as the NIFTY maintains the 9685 levels, no major downsides are expected. The upside, the range will remain capped as well. Overall, with near certainty that major and meaningful up move is expected, we continue to recommend adopting a stock specific approach in the Markets. With no structural breach on the charts, select downsides may be utilized to make modest purchases. It is recommended to keep overall exposures modest.

A study of Relative Rotation Graphs – RRG show that in the coming week, IT stocks are expected to relatively outperform the Markets. They are likely to be joined by select pockets of NIFTY Junior (NIFTY Next 50) and MIDCAPS. CNX Services stocks are also likely to relatively outperform. SmallCaps and INFRA stocks are likely to remain laggards. METAL Stocks are likely to maintain its range bound movement and its momentum. Auto, Realty and BANKNIFTY and FMCG is expected to relatively underperform but will attempt to consolidate its 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, 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 




Friday, September 29, 2017

MARKET OUTLOOK FOR FRIDAY, SEP 29, 2017

MARKET OUTLOOK FOR FRIDAY, SEP 29, 2017
The benchmark NIFTY50 had a volatile session on the expiry of the September series as it oscillated in a 70-point range and finally showed technical pullback in the second half of the session. It ended the day gaining 33.20 points or 0.34%. Two points that can be called important happened in the Thursday’s session. First, the NIFTY managed to hang on to the 100-DMA support at Close levels which stand at 9773; and second, in all probability, it has formed a large  trading channel that is marked with red line on the Charts while re-establishing the levels of 9685 as its immediate all important support. The Friday is expected to see a modestly positive start. In all likelihood, no major downsides are expected. On the other hand, no runaway rise may occur as well as we head into the extended weekend with Monday being a trading holiday.

Friday will see the levels of 9825 and 9860 playing out as immediate resistance levels for the Markets. Supports come in at 9730 and 9680 zones.

The Relative Strength Index – RSI on the Daily Chart is 36.7169 and it stays neutral showing no divergences against the price. Daily MACD stays bearish trading below its signal line. No significant formations were observed on Candles.

The pattern analysis shows that the NIFTY took a support at its previous lows of 9685 and rose nearly 90-odd points from there. It has re-established the supports of 9685 and has also created a broad rectangle trading channel until it is broken.

Overall, we still maintain a cautious view on the Markets. In all probability, the NIFTY may continue with its attempt to a technical pullback, it is likely to resist to the rising trend line – the channel – that I broke on the downsides. Unless there are specific negative news flows, no major downside is expected as well. All and all, we expect a session in a defined trading range and select outperformance in stocks will continue. While avoiding shorts, select buying can be done from lower levels.

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 28, 2017

MARKET OUTLOOK FOR THURSDAY, SEP 28, 2017

MARKET OUTLOOK FOR THURSDAY, SEP 28, 2017
The Indian Equity Markets had a thoroughly disappointing session the benchmark NIFTY50 continued its slide breaching the important support levels of 100-DMA. It ended the day losing 135.75 points or 1.38%. We enter the expiry day of the current derivative series on Thursday and there are high chances that we see volatility remaining ingrained in the session. The previous immediate low of 9685 and 9750 zones will be critical to watch out for. We believe that overall weakness may persist but within that a possibility of a technical pullback too cannot be ruled out. The behavior of the Markets vis-à-vis the levels of 9685 will provide cues for coming days. In all probability, the Markets have developed a large trading band for itself.

The levels of 9770 and 9860 will play out as immediate resistance levels for the Markets. Supports come in at 9685 and 9600 zones.

The Relative Strength Index – RSI on the Daily Chart is 33.6631. It has marked a fresh 14-period low which is Bearish but do not show any divergence against the price. The Daily MACD stays bearish while trading below its signal line. An Engulfing Bearish Candle has emerged. Usually this too attempts to find a base near current supports. However, this is just a potential indicator and needs confirmation on the following day.

The Pattern analysis shows the NIFTY trading below its 100-DMA but stays within its filter and above its previous immediate low of 9685. If it sees a technical pullback, it may form a broad trading range in forma of a rectangle for itself and is expected to oscillate between the levels marked. Any breach below 9685 might bring in more weakness.

There are chances that though broad based weakness might persist, we might see a mild attempt to pullback by the Markets. Also, behavior of the Markets against the level of 9685 will be critically watched. We recommend refraining from creating shorts as there is evident creation of large short positions in the system. It is advised to remain light on the overall exposure and refrain taking aggressive positions on either side.

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 27, 2017

 MARKET OUTLOOK FOR WEDNESDAY, SEP 27, 2017
After opening flat and extending losses in the first half of the session, the NIFTY saw a smart recovery from the low point of the day. It ended the day flat with a minor loss of 1.10 points or 0.01% recovering nearly 58 points from the low point of the day. We enter the penultimate day of the expiry of the current derivative series and we expect the session to remain dominated with rollovers. A mildly positive start is expected and the NIFTY may try and find base around these levels. However, an up move enough to move back into the upward rising channel will be important to avoid any further weakness.

The levels of 9910 and 9960 will act as immediate resistance levels while supports are expected to come in at 9820 and 9770 zones.

The Relative Strength Index – RSI on the Daily Chart is 41.2143. It has marked a fresh 14-period low and this is Bearish. However, it does not show any divergence against the price. The Daily MACD is bearish while trading below its signal line. On Candles, a Candle with a long lower shadow has emerged. It has a potential to halt the current downtrend and we can expect the Markets to attempt and find some base. Also, this Candle remains important as it has emerged when the Stochastic indicator is oversold and the support of 100-DMA remain in close vicinity.

While having a look at pattern analysis, the NIFTY has evidently marked a downward breach from the multi-month upward rising channel that it has formed. Tuesday’s close is just outside the Channel and it would be important for the Markets to crawl back into the trading channel again.

Overall, we expect the volatility to remain ingrained in Wednesday’s session. Also, attempt to find base by the Markets makes the 100-DMA support more important. With no signs of any reversal of trend, we expect the dips now being bought into once again. We recommend remaining light on overall exposures and also avoid shorts due to presence of significant short positions in the system. Cautious optimism is what is advised for Wednesday.

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 26, 2017

MARKET OUTLOOK FOR TUESDAY, SEP 26, 2017

 MARKET OUTLOOK FOR TUESDAY, SEP 26, 2017
Indian Equity Markets had a disappointing session once again as the benchmark NIFTY50 continued its decline and ended with net loss of 91.80 points or 0.92%. Monday’s corrective move has been of a technical nature and if some critical levels are not maintained, we may see weakness persisting in the Markets. These corrective activities remain significant given the present texture of the Markets. We expect a quiet start to the Markets on Tuesday but the 100-DMA of 9758 will be critically important not just for the immediate short term but for medium term as well. Any violation will mean disruption in the primary uptrend and the zones of 10150-10170 will be marked as immediate top for the Markets.

Tuesday will see levels of 9910 and 9965 will play out as immediate resistance levels for the Markets. Supports come in lower at 9810 and 9750 levels.

The Relative Strength Index – RSI on the Daily Chart is 41.2840 and it has marked a fresh 14-period low which is bearish. It does not show any divergence against the price. The Daily MACD has reported a negative crossover and it is now bearish while trading below its signal line. Occurrence of a big black body on candles reaffirms credibility of 50-DMA as the immediate resistance levels for the Markets.

The pattern analysis saw an important development today. It shows that any dip below the 9850 mark will imply a downward breach of NIFTY from the 6-month long upward rising channel that it has been trading in. It would be extremely important for the Markets to crawl back into this channel to remain in a trading range.

Any continuing breach of current Market levels will increase the chances of the benchmark testing its 100-DMA. In all likelihood, the NIFTY has transformed itself in a broad trading band and as of now no significant signs of a reversal of trend are seen. With the primary trend still very much in place, we recommend reducing the overall exposures and wait for the Markets to stabilize following which select purchases can be made.

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 25, 2017

MARKET OUTLOOK FOR MONDAY, SEP 25, 2017

MARKET OUTLOOK FOR MONDAY, SEP 25, 2017
Friday remained a particularly weak day for the Indian Equity Markets as the benchmark NIFTY50 saw a sharp crack while ending with a net loss of 157.50 points or 1.56%. We may cite and attach reasons like renewed geopolitical tensions, or any other such reason but the real problem lied somewhere else. Ever since the NIFTY marked its fresh high around 10179, there were evident signs like very high NIFTY PCR (Put to Call Ratio), and one of the lowest VIX levels which indicated unusual calm and complacency in the Markets.

On Monday, we may see a subdued start to the Markets. Presently Markets rest below its 20-DMA taking support at its 50-DMA which rests a 9954. It would be critically important for the Markets to maintain itself above this level of 50-DMA failing which we might see some more temporary weakness creeping in. The levels of 9990 and 10045 will act as immediate resistance levels for the Markets. Supports come in at 9954 and 9860 zones.

The Relative Strength Index –RSI on the Daily Chart is 47.5084. It has made its fresh 14-period low and this is bearish. A bearish divergence is also observed as the RSI has set a fresh 14-period low while NIFTY has not yet. Daily MACD is sharply moving towards negative crossover though it still continues to trade above its signal line. A big black candle that has emerged has re-validated the zones of 10150-10170 as immediate resistance zones.

All and all, we also enter the expiry week beginning Monday. There is high degree of chances that volatility will continue to remain ingrained. Any slip below 50-DMA will keep Markets subdued for some more time. For Monday and for rest of the coming days, we will see sessions remaining highly stock specific with out-performances coming in from select pockets. In all likelihood, the zones of 10150-10170 have been marked as a temporary top for the Markets until breached on the upside.

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