WEEKLY MARKET OUTLOOK FOR JAN 29 THRU FEB 02, 2018

WEEKLY MARKET OUTLOOK FOR JAN 29 THRU FEB 02, 2018

The Indian Equities saw the week ending on a strong note as the benchmark Index NIFTY50 ended stronger while closing the week with net gains of 174.95 points or 1.61%. The Markets ended positive if seen on a Weekly basis even if the Index consolidated in the second half of the week. While we head into another week beginning Monday, we are placed in a little tricky situation. While buoyancy is quite evident and the NIFTY has attempted to break out of the 24-month long upward rising channel, the lead indicators remain overbought and point towards likely consolidation and some corrective moves in the immediate short term. On the other hand, we go into the next week preparing to face one of the most important domestic events – The Union Budget – slated to be presented on Thursday. All these combined, are likely to infuse great volatility into the coming week.

The Weekly high of 11110 might act as immediate resistance for the Markets along with 11235 levels on the upper side. Supports come in much lower at 10980 and 10910 zones.

The Relative Strength Index – RSI on the Weekly Chart is 75.6039 and it has marked a fresh 14-period high which is bullish. RSI does not show any divergence against the price. The Weekly MACD is bullish as it trades above its signal line. Apart from the White Bodied Candle which shows continuation of the uptrend, not other significant formations were observed.

The pattern analysis presents an interesting picture. The NIFTY has attempted to break out of the 24-month long upward rising channel. However, while attempting this, it has turned overbought. If this condition is read along with other evidence present on the Chart, it might be a while before it continues with the breakout.

While the NIFTY has attempted a break out from a 24-month long rising channel, the other indicators do not paint a pretty picture for the immediate short term. The lead indicators are overbought. Though this denotes strength, it may lead to some short term corrective moves as well. The F&O data shows NIFTY PCR (Put-Call-Ratio) too in much overbought levels. The Volatility Index – VIX on the Weekly Charts is inching higher towards the levels seen only in 2016. Along with the deteriorated Market breadth, it will not be a surprise if the NIFTY goes in some volatile corrective moves. It is recommended to not to opt for a mad momentum chase but remain extremely selective while picking stocks and keep exposures to moderate levels.

A study of Relative Rotation Graphs – RRG show along with PSU Banks, and broader Indices like NIFTY Next 50, and Midcaps, CNX 200, CNX500 all have collective showed slowing down and evident loss of momentum. This is likely to continue in the coming week as well. Some sectors like FMCG, IT, Services, etc. may buck the trend and continue to show relative improvement in their performance as compared to the Markets in general. Auto and Pharma may see some select pocket of out-performance. Apart from this, overall loss of momentum across the Markets may be expected on weekly basis.

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

MARKET OUTLOOK FOR THURSDAY, JAN 25, 2018

MARKET OUTLOOK FOR THURSDAY, JAN 25, 2018

The Indian Equity Markets took a breather on the anticipated lines as it severely consolidated in a much capped range on Wednesday and traded without any directional bias. The benchmark Index NIFTY50 spent the entire session in a much capped ranged and ended the day on a flat note gaining just 2.30 points or 0.02%. Going into trade on Thursday, we enter the expiry day of the current derivative series. We expect a flat start but expect good amount of volatility owing to rollover. Despite some stock specific out-performances, we expect the Markets to face very stiff resistance at current levels. There are heightened chances that the Markets may witness some corrective activity at higher levels with limited downsides.

The levels of 11105 and 11165 will continue to play out as immediate resistance to the Markets. Supports come in much lower at 10955 and 10910 zones.

The Relative Strength Index – RSI on the Daily Chart is 82.5918 and though it has went on to mark a fresh 14-period high which is bullish, it trades in highly overbought territory. The Daily MACD is bullish while trading above its signal line. No significant formations were seen on Candles.

The pattern analysis shows that after breakout out above the 10490-mark, the NIFTY has achieved the levels which are higher than the otherwise expected measured implications. Though this shows uptrend firmly in place, we cannot ignore few technical inputs which point towards the Markets slipping into some short term consolidation.

Despite the current uptrend remaining firmly in place, we cannot ignore the extremely overbought nature of the lead indicators on the Daily Charts. The NIFTY PCR (Put-to-Call Ratio) currently stands near 1.90 which is highly overbought. Also, the India VIX (Volatility Index) is at its fresh high and rose nearly 11.19% while the Markets ended flat. All these point towards consolidation in a broad range starting anytime soon. Though the downsides may be limited, but volatile oscillations in the Markets cannot be ruled out. We recommend keeping exposures very light and adopting highly cautious view on the 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 
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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

MARKET OUTLOOK FOR WEDNESDAY, JAN 24, 2018

MARKET OUTLOOK FOR WEDNESDAY, JAN 24, 2018

The Markets continued with a strong upsurge on Tuesday and the Indices went on to end the day with record high closings. The benchmark NIFTY50 surged 117.50 points or 1.07% to end at yet another record high. Speaking purely on technical ground, the Markets ending near the high point of the day has prepared a ground for itself for yet another positive opening on the following day. Going into trade on Wednesday, we expect a modestly positive opening once again. However, with  the current levels, we need to approach the Markets with heightened levels of caution. Volatility is expected to creep in as we enter the penultimate day of the expiry of the current derivative series.

The levels of 11100 and 11175 will play out as immediate resistance levels for the Markets. Supports have now shifted higher but still exit little lower at 10975 and 10910 zones.

The Relative Strength Index – RSI on the Daily Chart is 82.5336. It has marked a fresh 14-period high which is bullish but it now trades heavily in overbought area. The Daily MACD stays bullish while it trades above its signal line.

The pattern analysis show the NIFTY firmly in a breakout mode and it is seen continuing with it for some more time. However, the overbought nature of the Markets warrants some caution and we might also see some volatility creeping into the Markets.

All in all, it is beyond discussion that the Markets are in firmly established up trend. However, that being said, the Markets are showing some signs of tiredness and some slowing down of momentum. The Market breadth remained a concern on Tuesday as the broader markets under-performed the frontline indices. Though the momentum may continue, it may slow down a bit and may show some reduction in relative strength. We recommend remaining highly cautious at higher levels. There are heightened chances that the Markets may take some breather at higher levels from here and may choose to consolidate. With volatility likely to remain ingrained in the Markets, we advice highly vigil approach with each higher level in the 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 
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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

MARKET OUTLOOK FOR TUESDAY, JAN 23, 2018

MARKET OUTLOOK FOR TUESDAY, JAN 23, 2018

The Indian Equity Markets continued to rally and went on to scale yet another peak while the benchmark Index NIFTY50 ended the day with a decent gain of 71.50 points or 0.66%. After a tepid start and a range bound trade in the first half of the session, the buoyancy returned once again. While going into trade on Tuesday, we expect the levels of 10880-10900 acting as a strong base. Though a quiet to modestly positive start is expected, there are heightened chances that the Markets encounter consolidation in a defined range while individual stocks continue to out-perform.

The levels of 10990 and 11075 will act as immediate resistance levels for the Markets. Supports come in at 10900 and 10865 zones. The range of the NIFTY has widened owing to the unabated move on the upside.

The Relative Strength Index – RSI on the Daily Chart is 79.2404. It has marked a fresh 14-period high which is bullish. However, it trades in overbought territory. The Daily MACD remains firmly in continuing buy mode and it is bullish while trading above its signal line.

The pattern analysis shows the up move remaining firmly in place. The NIFTY has ended in a unchartered territory and has shifted its base much higher at 10490-mark after breaking out above those levels.

We have to take note of the fact that the NIFTY now trades much overbought. However, being overbought is a sign of strength and it is no reason to sell. However, it may induce some consolidation at higher levels. The NIFTY has continued to close above the upper Bollinger band and this applies that the current breakout and the up move that we are witnessing may continue. However, given the fact that the Bollinger bands are 45.40% wider-than-normal, there are probabilities of NIFTY returning within a rage in coming days. In any case, this translates into buoyant outlook with limited downsides in the Markets. Some consolidation is expected but it is advised to continue to make purchases while guarding 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 
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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

MARKET OUTLOOK FOR MONDAY, JAN 22, 2018

MARKET OUTLOOK FOR MONDAY, JAN 22, 2018

The show of strength continued in the Indian Equities as after spending major part of the session with very limited gains, the benchmark NIFTY50 inched higher, set yet another lifetime high and ended the day with net gains of 77.70 points or 0.72%. While the Markets consolidated until later afternoon trade, there was no sign of any profit taking and stock specific action continued with each minor dip being bought into. Speaking purely on the technical ground, since we have ended near the high point of the day, there are high probabilities that we see a modestly positive start and the NIFTY extending its gains, at least in the initial trade.

The levels of 10910 and 10965 will play out as immediate resistance levels for the Markets. Supports come in at 10845 and 10810 zones.

The Relative Strength Index – RSI on the Daily Chart is 76.7650 and it has formed a fresh 14-period high which is bullish. It presently trades in overbought territory. Daily MACD remains firmly in buy mode while trading above its signal line. No significant formations were seen on Candles.

The pattern analysis reaffirms the buoyant intentions of the Markets. It has now successfully moved well past the 10490-mark and is very near to the measured implication of resolution of the pattern. It would be very much critical to see if the Markets continues with the breakout or faces some consolidation at higher levels.

All in all, the session on Monday and thereafter remains extremely critical. The NIFTY has ended above the upper Bollinger bad on both Daily and Weekly Chart. This should usually translate into continued up move and buoyancy in the Markets. However, the overbought nature of the lead indicators warrants some caution at higher levels. There are chances that before continuing with the up move, Markets faces some range bound consolidation once again. However, with undercurrent remaining evidently bullish, all weaknesses should be bought rather than selling all strengths.

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