MARKET OUTLOOK FOR THURSDAY,MAY 17, 2018

MARKET OUTLOOK FOR THURSDAY,MAY 17, 2018

After paring of gains and coming off over 120-points from the high point of the day in the previous session, the NIFTY saw follow-up weakness on Wednesday. The NIFTY opened with a modest gap down and drifted lower. The Markets made an attempt to recover from the lows of the day but still ended the Wednesday’s trade losing 60.75 points or 0.56%.

While keeping the prevailing uncertainties in Karnataka aside, though it does have some short-lived sentimental effect, the present technicals continue to point towards some more consolidation in the Markets.  We are likely to see a quiet opening on Thursday, the previous low and its range would be important support to watch for. The levels of 10680-10700 would be immediate levels wherein the NIFTY might consolidate again.

Thursday will see the levels of 10745 and 10785 acting as immediate resistance levels. Supports come in at 10680 and 10625 zones.

The Relative Strength Index –RSI on the Daily Chart is 60.1660. It continues to remain neutral showing no divergence against the price. The Daily MACD stays bullish while trading above its signal line. On the Candles, a Spinning Top was formed. It has a small real body and signifies a session full of indecisiveness on part of market participants.

Pattern analysis reveals that NIFTY has stalled its up move that it had resumed after suffering a throwback. NIFTY has broken out of a broad rectangle formation as evident from the Charts. However, even after a throwback and subsequent resumption of up move, the NIFTY still appears to remain under consolidation.

Overall, though we can expect some stability to reign in, volatility is still likely to remain very much ingrained in the session. Though any structural breakdown may not happen, but still oscillations within a given range are likely to remain volatile. Also, the higher levels of NIFTY PCR (Put to Call Ratio) still remain a concern. We expect consolidation to continue to happen and the NIFTY is likely to oscillate keeping the range of 10785-10930 as its major resistance area for the immediate short term. Highly cautious and stock specific approach is advised for the day.

STOCKS TO WATCH:

Selective longs were seen being added in stocks like ITC, PTC, JAIN IRRIGATION, IRB, HCC, ESCORTS, DISHTV, TECH MAHINDRA, DABUR, CAPITAL FIRST, NATIONAL ALUMINUM, MOTHERSON SUMI, YES BANK and ASIAN PAINTS.

(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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