WEEKLY MARKET OUTLOOK FOR APR 09 THRU APR 13, 2018

WEEKLY MARKET OUTLOOK FOR APR 09 THRU APR 13, 2018

The Indian Equities had a better week after a long time as the Markets saw weekly gains coming in. The NIFTY ended the week with a net gain of 217.90 points or 2.15% on a weekly note. The week that has gone by held and validated two technically significant events.

In our previous weekly note, we had expected and up move  since the critically important level of 10040 was defended and we had expected the Markets to move past the 200-DMA and Close above that. With both of these conditions getting fulfilled, we continue to remain in a 27-month long upward rising channel.

Global volatility has remained all through the previous week and is expected to remain in the coming week as well. We are also likely to remain affect with this global volatility as well. The coming week is likely to see the current week’s gains being extended. However, though follow up gains are expected, they will not come without some range bound volatile consolidation in the coming week.

The coming week will see the levels of 10390 and 10495 acting as immediate resistance area. Supports are expected at 10210 and 10115 zones. The range is likely to remain little wider in the coming week as we discount the probable volatility that is expected.

The Weekly RSI 51.3775 and it remains neutral showing no divergence against the price. Weekly MACD stays bearish as it trades below its signal line. A white body appeared on candles. This is little larger than the average and remains significant as it has emerged near an important support area on the Weekly Charts.

If we resort to Chart Pattern Analysis, the NIFTY is seen in a steady 27-month long upward rising channel that began in early 2016. The support of 10040 was held and the NIFTY presently continues to remain in this upward channel without any violation.

Overall, we maintain a positive bias for the coming week. Attention will be drawn towards the sectors which have shown under-performance since long. We will see some out-performance from such sectors which are showing evident improvement in relative strength against the general markets. While using consolidation phases to make select purchases, positive outlook is advised for the coming week.

A study of Relative Rotation Graphs – shows that there is evident loss of momentum in the IT pack and this is likely to extend in the coming week as well leading to slight loss of momentum in the IT Stocks. Coming week will see sharp improvement in relative performance of AUTO, ENERGY, INFRA  and broader Indices like CNX200, CNX100 and MIDCAP Universe along with NIFTY Next 50. These are the quarters which were undergoing sharp loss of momentum over previous week. With the relative momentum sharply improving in these Indices, they are expected to perform better. Apart from this, METAL pack may remain stagnant, and no major out-performance is expected from PSU Banks, PSE, REALTY and SMALL Cap universe.

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 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