Saturday, October 28, 2017

WEEKLY MARKET OUTLOOK FOR OCT 30 THRU NOV 03, 2017

WEEKLY MARKET OUTLOOK FOR OCT 30 THRU NOV 03, 2017
Despite and attempted breakout in the week that has gone by, the Friday’s session remained much subdued as the Markets consolidated on expected lines. We had expected the benchmark NIFTY50 to post modest up moves and in line with this analysis, the NIFTY ended this week with net gains of 112.20 points or 1.10% on Weekly basis. The Markets did attempt to give a breakout from the broad trading range but still saw no convincing gains after that. In the coming week, we expect that the Markets still has potential to keep giving marginal highs but any serious up move may still continue to elude us. Coming week is likely to continue to remain more stock specific in nature.

The levels of 10360 and 10490 will play out as immediate resistance area in the coming days. Supports come in at 10200 and 10060 zones.

The Relative Strength Index – RSI on the Daily Chart  is 68.5187. There is an evident Bearish Divergence on this indicator that shows that the NIFTY has marked a fresh 14-period high while RSI did not. The Daily MACD stays bearish while trading below its signal line. No significant formations are observed on Candles.

The pattern analysis shows that the Index has attempted a breakout but is evidently lacking the conviction. More so, going ahead, it may also resist the 18-month old rising trend line as seen on the Charts. All these may force the Markets into consolidation at higher levels.
All in all, we cannot ignore the buoyant undercurrents that are flowing in the Markets. 
However, also we cannot ignore are the divergent signals on the lead indicators, the fatigue that is evident and the other technical factors which say that the NIFTY may continue to give marginal highs in coming days but it is bound to face consolidation at higher levels as well. 
Overall, the coming week is likely to remain stock specific and we may continue to witness capped upsides and ranged consolidation over coming week.

A study of Relative Rotation Graphs – RRG show that while METAL stocks have continued to relatively out-perform, the momentum is seen fizzling out. Coming week will see sharp relative out-performance from MEDIA, INFRA and PHARMA Stocks. ENERGY stocks too are seen losing momentum. No significant out-performance is now expected from PSU and Private Banks. While FMCG, SERVICE  and REALTY stocks will consolidate, the broader MIDCAP universe will see select outperformance. Some momentum may now also be seen in AUTO 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@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, October 27, 2017

MARKET OUTLOOK FOR FRIDAY, OCT 27, 2017

MARKET OUTLOOK FOR FRIDAY, OCT 27, 2017
After initial hiccups in the morning  trade, the Indian Equity Markets on Thursday continued to chase momentum and went on to end at yet another lifetime high while gaining 48.45 points or 0.47%. The final hour of the trade remained volatile but that had more to do with rollovers. On Friday, as we head into the session, there are two distinct possibilities that we see happening simultaneously in all likelihood. There are bright chances that we see the markets chasing the momentum. Along with this, we are also likely to see the Markets meeting consolidation at higher levels as very evidently suggested by lead indicators.

The levels of 10350 and 10395 will play out as immediate resistance levels of the Markets. Supports come in much lower at 10265 and 10190 zones.

The Relative Strength Index – RSI on the Daily Chart is 69.8021 and it has marked a fresh 14-period high which is bullish. The Daily MACD stays bullish while trading above its signal line.

There is a minor technical reason to worry. Following a Hanging Man-like formation yesterday, today, an Engulfing Bearish Pattern has occurred. The worry part is that it has occurred during an up move and it often markets an immediate top for the Markets. Such formations do remain a potential threat to the ongoing up move.

The pattern analysis suggest that the NIFTY has attempted to breakout and has continued to do so. It is likely to continue with its attempt to move higher but the formation on Candles, coupled with divergent signals of lead indicators on Daily and Weekly Chart do not allow us to rest on our laurels.

The current structure of the Markets, though buoyant for the short to medium term, does not allow us to get complacent. We continue to recommend completely avoiding shorts due to the buoyant structure of the Markets; but at the same time, continue to chase momentum while deploying high degree of caution. Select stocks and sectors are likely to continue to out-perform the general 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  

Thursday, October 26, 2017

MARKET OUTLOOK FOR THURSDAY, OCT 26, 2017

MARKET OUTLOOK FOR THURSDAY, OCT 26, 2017
After two days of range bound consolidation, the Markets today attempted to breakout from a long rectangle formation which represents a broad trading range. The benchmark NIFTY50 ended the day with a decent gain of 87.65 points or 0.86%. The highlight of the Wednesday’s trade remained banks in general and public sector banks in particular as they witnessed a massive upsurge gaining in the range of 25-49%. Going into trade on Thursday, in all likelihood, we may see continuation of up move and the Markets continuing with its breakout. However, one should not still throw caution to the wind as we still await the confirmation of this strongly attempted breakout.

The levels of 10325 and 10390 will now act as immediate resistance area for the Markets. Supports come in at 10200 and then at 10130 zones.

The Relative Strength Index – RSI on the Daily Chart is 67.5283. A Bearish Divergence is observed as the NIFTY has formed a fresh 14-period high but the RSI has not done so. Daily MACD stays bullish trading above its signal line. On the Candles, a Rising Window has emerged. This is typically a gap with the low higher than the previous high. This usually has bullish implications. However, we cannot ignore the fact that this gap has also occurred like a “Hanging Man-like” formation which also have a potential to halt the up move for a while causing throwback.

Pattern analysis demonstrates the NIFTY attempting to breakout from a rectangle formation which represents broad trading range for the Markets. This usually needs confirmation on the next trading day in form or a higher top and higher bottom.

All in all, we will continue to see stock specific action continuing to dominate the trade on Thursday. Session is also likely to remain dominated with rollovers as we enter into expiry of the current derivative series. We would recommend approaching Markets with caution and restrict and keep overall exposures highly stock specific though undercurrent undoubtedly remains buoyant by all means.  

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, October 25, 2017

MARKET OUTLOOK FOR WEDNESDAY, OCT 25, 2017

MARKET OUTLOOK FOR WEDNESDAY, OCT 25, 2017
For the second day in a row the benchmark NIFTY50 settled the day with minor gains of 22.85 points or 0.22% while keeping its head once again above the 10200-mark. While doing into trade on Wednesday, we keep our analysis on similar and cautious lines. The NIFTY is creating a fresh and narrow congestion zone just near the breakout area of 10200 levels and it is fiercely consolidating around those levels. We expect a quiet opening on Wednesday but since we enter the penultimate day of expiry of current derivative series, we will see the session remaining similarly ingrained with volatility and rollover dominated activities. There will also be some sentimental reactions to the Infosys results whose numbers were in line with street expectations but cut its growth guidance.

The levels of 10250 and 10275 will continue to pose resistance to any attempted up move. The supports come in at 10130 and 10065 zones.

The Relative Strength Index – RSI on the Daily Chart is 62.8261 this indicator continues to remain neutral showing no divergences against the price. The Daily MACD stays bullish while trading above its signal line.

The pattern analysis continues to show indecisiveness of the Market Participants. The NIFTY is hovering around its breakout are but it has not yet achieved any clear breakout. Until the levels of 10250 are breached in a convincing manner, no sustainable rally would occur.

Overall, it is beyond doubt that the current structure and the primary trend continue to remain bullish. Also, longer the Markets consolidate in a narrow zone and does not show any decline, larger are the chances that it will give a positive breakout. However, as of this day and moment, we await this breakout. Unless we get a definite directional bias on the Markets, we will have to continue to approach the Markets on a cautious note and remain highly stock and sector specific.

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, October 24, 2017

MARKET OUTLOOK FOR TUESDAY, OCT 24, 2017

MARKET OUTLOOK FOR TUESDAY, OCT 24, 2017
The benchmark NIFTY50 swung nearly 90-odd points on either sides as the session remained much volatile on the expected lines. It has not achieved a clear breakout even as of now while continuing to resist to 10230-10250 zones. Going into trade on Tuesday, we can continue to expect these levels to continue to pose resistance while the NIFTY creates an congestion area; or if it returns back to the broad trading range. In either case, despite a bullish set up, we cannot take the levels of 10230-10250 lightly until a clear breakout is achieved.

The levels of 10230 and 10275 will act as immediate resistance area for the Markets. Supports  come in at 10120 and 10030 levels.

The Relative Strength Index – RSI on the Daily Chart is 61.4757 and it remains neutral showing no divergences against the price. The Daily MACD stays bullish while trading above its signal line but it is sharply narrowing its trajectory. A Spinning Top on Candles further proves the state of indecisiveness the Market participants are in.

While having a look at pattern analysis, it is evident that the NIFTY has not yet achieved a clear breakout but it is definitely attempting to achieve it. However, no sustainable rally would occur unless the NIFTY moves past 10250 with conviction.

Overall, as mentioned often in our previous notes, the Markets shall remain more sector and stock specific. No general out-performance will be seen but we will see select stocks from select sectors like IT, INFRA, MEDIA, etc. continuing to relatively outperform. We still continue to recommend adopting highly stock specific approach to the Markets. All up moves should be approached while remaining highly vigilant and protecting profits at higher 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  

Monday, October 23, 2017

MARKET OUTLOOK FOR MONDAY, OCT 23, 2017

MARKET OUTLOOK FOR MONDAY, OCT 23, 2017
In our couple of previous notes, we had pointed out that due to certain factors the Markets may not achieve a clean break out and might return to the broader trading range that it has developed over last couple of weeks. Such unfavorable technical factors weighed heavy on the Markets and following this, the just one-hour Muhurat Trading session on Thursday remained one of the worst of recent times. The benchmark NIFTY50, which never otherwise sees volatile movements on such occasions, went on to end with net loss of 64.30 points or 0.63% after some recovery from the low point of the day. Going into trade on Monday, we believe that corrective undertone might persist and for the immediate foreseeable future, the levels of 10250 will act as immediate major resistance area.

The levels of 10195 and 10250 will act as immediate resistance area for the Markets. Supports come in at 10065 and 9980.

The Relative Strength Index – RSI on the Daily Chart is 59.1669 and it remains neutral showing no divergences against the price. The Daily MACD is bearish while trading below its signal line.

While having a look at pattern analysis, it is very much evident that the Markets did not achieve a clean break out while attempting to move past the 10190 levels. In all probability, since the NIFTY has ended below these levels, it will return again into this broad trading range.

With the high probability of the Index returning into the broad trading range and not achieving a clear breakout, we might see volatility returning to the Markets as well. Coming week will also see rollovers dominating the intraday trajectory of the trade. Up moves, if any, will continue to face resistance in the 10200-10250 zones. Select sector out-performance will be seen. Overall, cautious view 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  

WEEKLY MARKET OUTLOOK FOR OCT 23 THRU OCT 27, 2017

WEEKLY MARKET OUTLOOK FOR OCT 23 THRU OCT 27, 2017
The Markets on Thursday traded for an hour in the Muhurat Session and remained weaker than expected. The NIFTY ended in the red but in the short week that has gone by, the benchmark NIFTY50 ended the week with modest gains of 43.40 points or 0.43%. In all probability, we will see limited upsides in the coming week with the levels of 10250 playing out as the key resistance zone. The NIFTY is all likely to return in the rectangle formation trading that that has emerged over past couple of weeks. With the patterns remaining fractal in nature, such pattern has also emerged on the Daily Chart as well. Further sustainable up move can be expected only after the Index moves past the 10250-mark once again in convincing manger.

Coming week will see the levels of 10250 and 10350 playing out as immediate resistance area for the Markets. Supports come in at 10050 and 9930 zones.

The Relative Strength Index – RSI on the Weekly Chart is 64.7199 and it remains neutral showing no divergence against the price. Daily MACD continues to remain bearish while trading below its signal line. Apart from a black body, no significant formations were observed on Candles.

The pattern analysis shows that the Index attempted to breakout from the small rectangle pattern but has not been able to do so. In most likelihood, it has returned back to this trading zone and in the coming week as well, it is likely to remain in this broad trading zone.

Coming week and thereafter, the Markets are likely to remain more stock specific than ever. We will see highly stock specific select out-performance. We will see few sectors standing out but the broader indices are likely to trade with corrective undertone. In all likelihood, the Markets have entered into the time-correction mode wherein instead of seeing outright decline in prices, it remains thoroughly range bound and spends considerable amount of time oscillating in a defined range before breakout once again.

A study of Relative Rotation Graphs – RRG show that while METAL stocks are likely to show strong relative outperformance, we might see AUTO, MEDIA  and some stocks from MIDCAP universe trying to consolidate and further improve its relative out-performance. ENERGY and IT stocks have shown loss of momentum this week and are likely to do so in coming week as well. PSUBANKS and BANKNIFTY continued to lag and no major improvement in performance is expected this coming week. FMCG and PHARMA are likely to see select out-performance as well.  FINANCIAL SERVICES and INFRA are expected to struggle.

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