Gemstone Equity Research & Advisory Services: 2018

Thursday, August 2, 2018

Attention Requested

Hello,

We have been publishing Daily Market Outlook (formerly known as Daily Market Trend Guide) which is presently in its 15th year of publication. With our revamped website, we have tried to segregate the Daily Market Outlook, Weekly Market Outlook and Special Articles and present it in more convenient order from July, 2018

However, until July, 2018, all the previous editions of Daily Market Outlook, Weekly Market Outlook and Special Articles are in the below blog. Though they are not segregated, they certainly provide all access to all the previous editions of the above publications.

~Milan Vaishnav, CMT, MSTA
Consulting Technical Analyst

Sunday, July 1, 2018

MARKET OUTLOOK FOR MONDAY,JULY 02, 2018

MARKET OUTLOOK FOR MONDAY,JULY 02, 2018

In our Friday’s note, we had mentioned about possible attempts by NIFTY to gain some stability after few series of decline. The Friday’s session saw a sharp uptick in the Index and the benchmark NIFTY50 ended the day with a decent gain of 125.20 points or 1.18%. It needs to be noted that the upsurge that was witnessed in the previous session has been mainly on back of short covering.

As we approach Monday’s trade, we still need to be cautious as we approach the Markets. NIFTY is still not out of the woods. With the sharp technical pullback that was witnessed in the previous session, it remains unclear that whether the downward breakout in the NIFTY has failed and the Markets may continue with its pullback; of the present pullback just remains a dead cat bounce.

Monday will continue to see the levels of 10765 and 10800 posing resistance to the Markets. Supports come in at 10690 and 10610 zones.

The Relative Strength Index – RSI on the Daily Chart is 50.0297 and it remains neutral without showing any kind of divergence against the price. The Daily MACD is still bearish while trading below its signal line. No significant formations were observed on Candles.

If we look at the pattern analysis, the NIFTY has pulled back sharply after slipping below its 50-DMA. Presently, it has inched higher than the 50-DMA and has held this as support at Close. On the other hand, the downward breakout from the large symmetrical triangle still continues to persist.

Overall, we recommend continuing to approach the Markets with caution. We might see a flat to mildly positive start to the trade on Monday, but it would be critical for the NIFTY to now move past 10800-mark for a sustained pullback. It is not yet confirmed that whether the downward breakout of the NIFTY has failed or the present up move just remains a dead cat bounce. We also recommend to remain largely exposed to the large caps as the broader Markets may still continue to see some prolonged pressure.

STOCKS TO WATCH:

Relatively resilient technical set up is observed in stocks like IDBI BANK, ADANI POWER, JAIN IRRIGATION, ASHOK LEYLAND, TATA MOTORS, IDEA, ITC, TATA STEEL and JET AIRWAYS.

(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 known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

+91- 70164-32277 / +91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Friday, June 29, 2018

WEEKLY MARKET OUTLOOK FOR JUL 02 THRU JUL 06, 2018

WEEKLY MARKET OUTLOOK FOR JUL 02 THRU JUL 06, 2018

We had feared some technical damage in our previous Weekly Note if the NIFTY is not able to breach the 10820-10850 zones on the upside. After struggling all throughout the week before this, the NIFTY saw itself giving up to this resistance area. Even with the NIFTY ending on a strong note on the last trading day of the week, it has still ended the week with net loss of 107.55 points or 0.99%.

Though there is some minor structural damage on the Daily Charts, the Weekly Charts still see the NIFTY continuing to resist to the falling trend line; however, no break down on this longer term time frame chart is seen.

As we step into fresh week from Monday, the NIFTY still continues to remain in a critical condition, just not out of the woods. On the daily Charts, there is clear break down from the large symmetrical triangle. On the longer term Weekly Charts, it still continues to resist to the falling trend line drawn from the life time high.

Next week will continue to see the levels of 10830 and 10945 posing great resistance to the Markets. Supports come in at 10600 and 10480 zones.

The Weekly RSI stands at 56.5632. RSI continues to remain neutral and shows no divergence against the price. The Weekly MACD still remains bullish while trading above its signal line. No significant formations were observed on Candles.

While having a look at pattern analysis, NIFTY continues to resist to the falling trend line that emerges from the high of 11170 and joins the subsequent lower tops. This makes evident that unless the NIFTY moves past 10800-mark, it will continue to resist to the falling trend line pattern resistance.

Overall, though Friday’s session saw sharp short covering led rally, it would important to see if this means failure of a negative breakdown from a formation or it is just a dead cat bounce. The coming week will remain equally crucial like the previous one. We recommend maintaining cautious view on the Markets and restrict purchases to specific stocks and s

ectors only. More relative stability is expected large caps and front line Markets. Broader markets performance might still continue to remain a concern.

A study of Relative Rotation Graphs – shows that ENERGY pack has entered the Improving Quadrant and is likely to spruce up its relative performance coming week. With this, the PSU Banks have maintained its resilience against the broader markets. Apart from this, BANKNIFTY and FINANCIAL SERVICES pack remain very much in the Leading Quadrant while continuing to improve both on relative strength and momentum. They are likely to continue to lead the outperformance against the general markets along with Services sector. FMCG continues to lose momentum and strength along with CNX IT and this is likely to continue in the coming week. All broader Market Indices like CNX100, 200 and 500 along with NIFTY JR. and MIDCAP Universe have steadily continued to lose both relative momentum and strength. METAL, INFRA and MEDIA too are not expected to put up any eye-catching show.

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

MARKET OUTLOOK FOR FRIDAY,JUNE 29, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 29, 2018

In our previous note, we had feared about possible breakdown in NIFTY if the levels of 50-DMA are not held at Close levels. On these lines, the NIFTY continued with its slide on Thursday’s session and the benchmark index ended the day losing 82.30 points or 0.77%. Relatively speaking, the session remained less volatile given the fact that it dealt with the expiry of the June series.

As we step into Friday’s trade, speaking on broad terms, we are likely to see some more weakness persisting in the Markets. The nearest support that is seen is at 100-DMA which stands at 10530. It would be important to see if this remains sacrosanct and respected by the Markets.

Friday is likely to see the levels of 10630 and 10655 to pose resistance at higher levels. Supports come in at 10530 and 10480 zones.

The Relative Strength Index – RSI on the Daily Chart is 41.1590 and it has gone on to mark a fresh 14-period low which is bearish. It shows no divergence against the price. The Daily MACD stays bearish while trading below its signal line. No major formations were observed on Candles.

Going by the pattern analysis, it is now pretty evident that the NIFTY has as of now failed to navigate and move past the pattern resistance of the falling trend line. Going further, the NIFTY has shown a downward breakdown from the large symmetrical triangle formation.

Overall, we might see NIFTY attempting to gain some stability, but the current break of the pattern formation has made one point clear that going ahead is not likely to be smooth for the NIFTY going ahead. We will see this pattern that is breach likely to act as resistance for the Markets going ahead. We recommend paring exposure in high beta stocks and returning to large caps that offer more safety moving forward. It is advised to take extremely cautious view on the Markets and avoid major exposures while remaining highly selective in approach towards any fresh purchases.

STOCKS TO WATCH:

Relatively resilient technical set up is observed in stocks like CG POWER, PNB, NATIONAL ALUMINUM, NTPC, ADANI PORTS, NBCC, LARSEN TOUBRO, JSW ENERGY and LT FOODS.

(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)

Wednesday, June 27, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 28, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 28, 2018

Equity Markets had a thoroughly disappointing session on Wednesday as the NIFTY slipped after witnessing selling pressure and ended the day with a net loss of 97.75 points or 0.91%. The grim part of the story was that the NIFTY showed likely breakdown from a pattern formation which shows the NIFTY right into its apex and subsequently giving up.

Thursday’s opening levels and trajectory post opening would be extremely crucial for the Markets. If the NIFTY does not show any pullback on Thursday, it has increased its chances of progressing ahead with a breakdown and confirming it. In the process, in event of any meaningful pullback, it will also increase its chances of testing its 100-DMA which stand at 10533. The coming days remain highly crucial from such many angles.

Thursday is also expiry of the current derivative series and given the shorts in the system, we also stare at a possible pullback. However, the broader pattern formation forces us to sit with fingers crossed. On the higher side, the levels of 10720 and 10760 will resist the pullback, if any, while the supports will come in much lower at 10640 and 10590 zones.

The Daily RSI stand at 46.1609 and it has marked its 14-period low which is bearish. MACD stays bearish while it trades below its signal line. On the Candles, a big white body occurred. It remains significant as it emerged near the pattern area resistance of the falling trend line and lends further credibility to the resistance.

Overall, we stare at a two way move on the NIFTY. On one hand, there are remote chances of a technical pullback happening if the NIFTY validates the 50-DMA support at Close. NIFTY has closed a notch below this. Also, the high amounts of shorts that exist in the system provide a ray of hope for a technical pullback given the expiry day. On the other hand, NIFTY stares at a possible breakdown from the large symmetrical triangle formation which would make it vulnerable to test 100-DMA. We recommend highly cautious approach to the Markets and advice staying away from creating any major exposures.

STOCKS TO WATCH:

Fresh shorts were seen in the stocks like IDEA, SAIL, IDFC, IDFC BANK, ICICI BANK, ITC, DHFL, PFC, TV18 BROADCAST, ASHOK LEYLAND and NTPC.

(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)

Tuesday, June 26, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 27, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 27, 2018

The Indian Equity Markets headed nowhere as the benchmark Index spent the entire session in a range bound trade. The Index oscillated in a narrow range and settled the day with nominal gains of 6.70 points or 0.06%.

In a way, NIFTY displayed great resilience to the overnight global weakness. However, it is important to note that it has continued to resist to the falling trend line and has not yet achieved any meaningful directional bias. It also continues to remain in a broad symmetrical triangle formation as evident from the Charts.

We can expect a stable opening on Wednesday but it is likely that either on Wednesday or in coming days, NIFTY is set to resolve the current pattern formation with a sharp move on either side.

We expect the levels of 10820 and 10850 to act as immediate resistance levels. Supports come in at 10740 and 10680 zones.

The Relative Strength Index – RSI on the Daily Chart is 53.3053. It remains neutral showing no divergence against the price. The Daily MACD is bearish as it trades below its signal line. Apart from a small white body that occurred, no significant formations were observed on Candles.

Going by pattern analysis, NIFTY still remains within a broad symmetrical triangle formation and is moving towards its apex. It has not achieved any directional breakout as of now and is treading near its 20-DMA. The resolution of this pattern with a sharp directional move on either side is imminent in coming days.

In absence of any breakout, we still need to approach the Markets with caution. It is a positive sign that despite global weakness, NIFTY has demonstrated internal strength by continuing to consolidate and not showing any draw downs. However, with expiry lurking around us and with NIFTY still struggling with a major pattern resistance, it would be prudent to stay with more liquidity and maintain light exposures while remaining highly stock specific in the approach to the Markets.

STOCKS TO WATCH:

Long positions were seen being built in stocks like BANK OF BARODA, ITC, ASHOK LEYLAND, NTPC, YES BANK, IDEA, ONGC, CG POWER, SUN PHARMA, NCC, BHARTI AIRTEL and HINDALCO.

(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)

Monday, June 25, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 26, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 26, 2018

The Indian Equity Markets returned bulk of its previous day’s gains on Monday as it ended the first day of the Week on a negative note losing 59.40 points or 0.55%. The Markets traded stable for the major part of the session but it was the last hour of the trade that saw the weakness creeping in. The NIFTY’s struggle with the falling trend line pattern resistance continues and with NIFTY not able to move past the critical 10820-10850 zones, it is getting vulnerable to pressures as it moves into the apex of the broad symmetrical triangle that it has been trading in.

Stepping into Tuesday’s trade, we see possibilities of weakness persisting due to the weaker global picture. In any case, the zones of 10820-10850 continue to pose critical resistance to the Markets.

Tuesday will see the levels of 10820 and 10850 offering resistance while supports are expected to come in at 10740 and then at 10680 in form of 50-DMA.

The Relative Strength Index – RSI on the Daily Chart is 52.8408. It continues to remain neutral showing no divergence against the price. Daily MACD stays bearish while trading below the signal line. The emergence of a strong black body on Candles has once again lent credibility to the pattern resistance.

Pattern analysis shows NIFTY continuing to fiercely resist to the falling trend line which joins the high of 11170 to the subsequent lower tops. While it continues to remain in a broad symmetrical triangle pattern, it is moving near its apex and is becoming prone to a sharp move in coming days.

Overall, it is time that we once again tread the Markets with some caution. Though it currently rests very near to its short term 20-DMA, any weakness will make sure that the NIFTY tests its 50-DMA. Also, with each day with no directional move happening, NIFTY is also making itself vulnerable to a sharp move that will lead to resolution to the current pattern. We recommend staying away from taking any major directional call and avoid heavy purchases. Shorts too should be avoided until Markets makes any meaningful directional move. While remaining light on positions, preservation of cash with cautious view on the Markets is advised for the day.

STOCKS TO WATCH:

Relatively resilient technical set up is observed in PNB HOUSING, SUN TV, NBCC, TECH MAHINDRA, FIRST SOURCE, INFOSYS, UPL, TVS MOTORS, BEML,OIL INDIA, HAVELLS and INDIGO.

(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)

Sunday, June 24, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 25, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 25, 2018

After trading initially in the red in the first half of the session and with modest gains after than on Friday, the Indian Equity Markets saw a sharp upsurge in the last hour of the trade. The benchmark Index NIFTY50 saw a sharp up move and finally ended the day gaining 80.75 points or 0.75%. This was mainly led by short covering as the NIFTY futures ended with premium and with shedding of net Open Interest.

As we approach Monday and also the beginning of the expiry week of the current derivative series, the opening levels and the behavior of the NIFTY vis-à-vis the level of 10850 continues to remain very critically important. Sooner the NIFTY moves past this level, larger will be the chances of a sustainable up move in coming days. Any drift or failure to move past this level for too long will make the NIFTY vulnerable once again to volatility and profit taking bouts.

The levels of 10850 and 10895 will act as important resistance levels for Monday. Supports come in at 10780 and 10740 zones.

The Relative Strength Index – RSI on the Daily Chart is 57.5545. It remains neutral showing no divergence against the price. The Daily MACD still remains bearish while trading below its signal line. No significant formation was observed on Candles.

If we have a look at pattern analysis, NIFTY is still in a broad symmetrical triangle formation and is moving further into the apex. Also, in the process, it is continuing to vehemently resist to the falling trend line which joins the high of 11170 with the subsequent lower tops.

Overall, if we analyze the broader picture, NIFTY did not correct significantly whenever it met with a pattern resistance. Instead, it chose to consolidate in a capped range with some amount of volatility ingrained in it. We may see this behavior of the NIFTY as its underlying strength. However, until a resistance is breached on the upside, it gets little speculative to anticipate a breakout unless few indicators point towards such anticipated breakouts. We still advice to exercise caution and keep exposures at modest levels. Shorts should be avoided and major directional call can be taken if the NIFTY moves past and closes above 10850-mark with conviction.

STOCKS TO WATCH:

Long positions were seen being build in JSW STEEL, TATA MOTORS, STATE BANK, TATA STEEL, VEDANTA, PFC, ITC SAIL, HDFC, ICICI BANK, BHARTI AIRTEL, NTPC and TV18 BROADCAST.

(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)

Saturday, June 23, 2018

WEEKLY MARKET OUTLOOK FOR JUN 25 THRU JUN 29, 2018

WEEKLY MARKET OUTLOOK FOR JUN 25 THRU JUN 29, 2018

In our previous Weekly note, we had mentioned about the critical importance of the 10820-10850 zones and likelihood of volatility creeping into the Markets. Much on the expected lines, NIFTY struggled throughout the week to move past this resistance zone of 10820-10850 levels but still ended in between these critical levels. In the meantime, all throughout the week, it continued to resist to this important pattern resistance area. NIFTY ended the week absolutely flat with negligible gains of 4.15 points or 0.04% on weekly basis.

We approach expiry in the coming week and we expect the week to remain dominated with rollover centric activities. Though the NIFTY has fiercely attempted to move past this the resistance zone, it still rules below the 10850-mark. This level, therefore, remains critical for the coming week as well. It would be important for NIFTY to breach this level on the upside for any meaningful up move. Unless this happens, it remains vulnerable to slip into some more consolidation.

Coming week will see the levels of 10890 and 10985 as immediate resistance area. Supports come in lower at 10760 and 10675 zones.

The Relative Strength Index – RSI on the Weekly Chart is 60.8638. It shows no failure swings but shows a mild bearish divergence. This is because RSI has not formed a fresh 14-period high while NIFTY reported a fresh 14-period closing high. However, it is seen attempting to break out of a pattern. Weekly MACD stays bullish while trading above its signal line. A pattern resembling to a Hanging Man occurred on NIFTY. Since this has occurred after a pullback, we might see some stalling of up move in NIFTY. However, this needs confirmation.

Overall, NIFTY still is yet to move past the pattern resistance. This pattern resistance comes in form of a falling trend line which joins the high of 11170 with the subsequent lower tops. Though likelihood of NIFTY breaking out above this pattern resistance is quite high, but until it actually moves past and closes above 10850-mark, we cannot take NIFTY as completely out of the woods. We recommend avoiding shorts and keep overall exposure at modest levels. While extremely selective buying may be done, a cautious approach with a tinge of optimism is what is advised for the coming week. Before taking any major directional call, a confirmation to this attempt of moving past the pattern resistance should be awaited.

A study of Relative Rotation Graphs – shows that BANKNIFTY has continued to relatively outperform the general Markets and the PSU Bank pack has continued to further improve its relative momentum. The coming week will see relatively better performance from the BANK NIFTY, PSU Banks to some extent. The Financial Services pack along with Services sector is likely to relatively outperform. Stock specific performance is also likely from FMCG Pack. Though it remains in leading quadrant, it is seen losing its momentum. No improvement on the momentum front is seen in broader Indices like CNX100, 200 and 500 along with NIFTY JR., and NIFTY MIDCAP universe. REALTY might see some individual performances. No major show is expected from AUTO and METAL Pack. PHARMA is likely to remain strong and improve its relative out performance.

(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)

Gemstone Equity Research & Advisory Services

Thursday, August 2, 2018

Attention Requested

Sunday, July 1, 2018

MARKET OUTLOOK FOR MONDAY,JULY 02, 2018

Friday, June 29, 2018

WEEKLY MARKET OUTLOOK FOR JUL 02 THRU JUL 06, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 29, 2018

Wednesday, June 27, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 28, 2018

Tuesday, June 26, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 27, 2018

Monday, June 25, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 26, 2018

Sunday, June 24, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 25, 2018

Saturday, June 23, 2018

WEEKLY MARKET OUTLOOK FOR JUN 25 THRU JUN 29, 2018

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