MARKET OUTLOOK FOR TUESDAY,APR 17, 2018

MARKET OUTLOOK FOR TUESDAY,APR 17, 2018

A remarkable resilience was put on display by the Indian Equity Markets on Monday as the Index opened lower, recouped all of its losses by afternoon and ended with gains. The NIFTY closed the day gaining 47.75 points or 0.46%. In our previous note, we had expected the Markets to put up a resilient show. However, this being said, the NIFTY has ended with gains for the 8^th day in a row.

As we approach Tuesday, there are no second thoughts and the Markets are continuing to display a buoyant undercurrent. In the same breath, it is time that we now approach the Markets with caution. Some consolidation at current or little higher levels seem imminent it is time that we approach each up move with a pinch of additional caution.

For a healthy up move to continue, the Markets seen overripe for some consolidation. Tuesday will see the levels of 10550 and 10580 posing resistance to the Markets. Supports come in at 10490 and 10450 zones.

The Relative Strength Index – RSI on the Daily Charts stand at 61.6643. It marks yet another 14-period high which is bullish. RSI continues to remain neutral showing no divergence against the price. Daily MACD remains bullish while trading above its signal line. On the Candles, an engulfing bullish pattern has occurred. It is important to note that if such pattern emerges during an up move, it has a potential to temporarily halt the present up trend and push the Markets towards some consolidation.

While having a look at pattern analysis, it remains evident that the NIFTY looks little overstretched on certain oscillators. Further, if we have a simpler look, the NIFTY is approaching its important pattern resistance which lies in the 10550-10580 zones.

Overall, we are likely to see undercurrent remaining extremely buoyant. However, we also expect some volatility to creep in and some range bound consolidation to occur. For a healthier continuation of the current up move, it would be necessary for the Markets to consolidate a bit. We will see the session remaining highly stock specific and select out-performance will continue. While remaining light on overall exposure, proper rotation of sectors and stocks is advised while protecting profits at higher levels.

STOCKS TO WATCH:

Technically buoyant set up is observed in stocks like INDIABULLS REAL ESTATE, SAIL, JAIN IRRIGATION, JINDAL POWER, CIPLA, CGPOWER, HIND ZINC, VEDANTA, ASHOK LEYLAND, NCC, NOCIL, EXIDE INDUSTRIES and GRASIM.

(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 
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