Saturday, February 3, 2018

WEEKLY MARKET OUTLOOK FOR FEB 05 THRU FEB 09, 2018

WEEKLY MARKET OUTLOOK FOR FEB 05 THRU FEB 09, 2018

Equity Markets saw a pathetic ending to the Week as the Markets reacted negatively and in a volatile manner to the Union Budget. The benchmark NIFTY50 ended the week with a net weekly loss of 309.05 points or 2.79%. If we have a deeper look, the pain was much more in the broader Markets. The Midcap Indices fell 4% to 6% while the NIFTY Small Cap Index lost as much as 10.63%. In the coming week, we do not expect a drastic pullback in prices but we certainly see that the Markets in general may attempt to find stability. While some pain may be visible in broader markets, the attempt to find stability may come from the front line large cap stocks.
The coming week will see stiff resistance coming in at 10900 and 11170. Supports come in much lower at 10600 and 10480 zones. The markets have 3% gap on either side to move in the coming week as the volatility has expanded its range.
The Relative Strength Index – RSI on the Weekly Chart is 63.3798 and it has just moved below 70 from a topping formation. The Weekly MACD still remains bullish as it continues to trade above its signal line. A big black candle has emerged with an engulfing bearish line. This has given credibility to the resistance area of 11100-11170 area and has temporarily marked this area as its top.
Pattern analysis paints a relatively simpler picture. The NIFTY attempted to break out of the 24-month long upward rising channel. But the previous week’s Close has sent NIFTY back into this rising channel. Even at current levels, it trades well above its short term 20-Period Moving Average.
All in all, the coming Week certainly does not print a pretty picture. It does not show possibilities of any sharp technical pullback. However, it does show likelihood that the Markets may attempt to find stability. Heavily leveraged positions from the broader markets will continue to find its way out. We strongly recommend traders not to attempt to find bottoms but maintain adequate liquidity to protect their positions. Markets may still take some time before it fully digests the Budget. Smart portfolio investors were seen initiating and rotating their positions and it is likely to continue in the coming week as well.
 A study of Relative Rotation Graphs – RRG shows that baring sectors like IT and FMCG, there is evident sharp loss of momentum across all sectors in the Markets. IT and FMCG are likely to be stand alone relative out-performers in the coming week. Along with this, we will see METALS which has been weakening for quite some time, may see some attempt to consolidate and improve its relative performance against the general Markets. Therefore, apart from IT, FMCG and some pockets of METAL pack, no major outperformance is expected from any quarter of the Market.
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


Friday, February 2, 2018

MARKET OUTLOOK FOR FRIDAY, FEB 02, 2018

MARKET OUTLOOK FOR FRIDAY, FEB 02, 2018

Equity Markets witnessed immense volatility today during the Budget Session and the benchmark Index NIFTY50 swung 175-points on either side during the day. Despite such volatility, the Index ended the day virtually flat losing 10.80 points or 0.10%. Markets saw a sharp 170-odd point’s recovery from the lows of the day in the second half of the session.
The Budget, in all likelihood, will be perceived in a mature way by the Markets. Though there will be still some follow-up reactions to the Budget for couple of days, the level of 10,880 which remains in the vicinity of the short term 20-DMA shall act as a strong base for the Markets.
The levels of 11,075 and 11,110 will play out as immediate resistance area for the Markets. Supports come in at in form of a strong base around 10880-mark.
The Relative Strength Index – RSI on the Daily Chart is 69.2956 and it has just crossed below 30 from a topping formation. The Daily MACD remains in buy mode while trading above its signal line but is seen moving towards negative crossover. On the Candles, a long-lower-shadow occurred. This usually halts the downtrend if it happens during a correction or a consolidation and hints towards a potential pullback. However, this needs confirmation on the next trading day.
The pattern analysis shows that the NIFTY has done nothing but consolidated on Close basis despite 175-point swing on either side. The volatility has ensured that a likely base may be formed near the 10880-mark which also happen to lie within a close proximity of the short term 20-DMA and hence is expected to act as strong support.
All in all, if we look at Markets from point of view of Budget proposals, the Budget may not be taken too badly by the Markets despite some short term volatility that may still remain. The major takeaways from the Budget are rural focus, infrastructure boost, benefits to marginal farmers, extending corporate tax rate cut to MSMEs, and encouraging rural spending.
It was believed that the Budget will grossly remain a populist one. Not only this turned out to be a more fiscally prudent, the FM also introduced return of LTCG at 10% which may induce short term volatility.  Despite looming 2019 elections, the FM chose to remain fiscally prudent will taken in good spirits by the Markets in the long run once the immediate reactions are over. We recommend preserving liquidity and saying away from creating any speculative bets as all volatility will present fresh selective buying opportunities.
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


Thursday, February 1, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 01, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 01, 2018


The Indian Equity Markets remained volatile on expected lines. Though the benchmark NIFTY50 recovered smartly in the last hour of the trade by nearly 60-odd points, it still settled the day with net loss of 21.95 points or 0.20%.
As we go ahead into the session on Thursday, we need to look at it in little special and different way. We face Union Budget, which is undoubtedly one of the most important domestic events that a Market faces. Having said this, we also need to understand that many times, pure technical reading is never enough on such days and we need to have a broader and macro view of the Market’s behavior.
We expect a quiet start to the trade on Thursday and until the Budget proposals start rolling in, we expect range bound trade in the morning. Only after the proposals start rolling in, we will see volatility creeping in the session. With the levels of 11,170 and 10,235 acting as immediate resistance to the Markets, we expect the levels of 10910 acting as strong support unless anything nasty comes up in the Budget.
The Relative Strength Index – RSI on the Daily Chart is 70.4888 and it remains neutral to the price showing no divergence. The Daily MACD remains bullish. On Candles, an on-neck line occurred. However, in the present formation, it does not hold any significance.
Pattern analysis shows that NIFTY has taken a breather after a stellar rally that it saw in January. It is seen taking a breather and has marked 11,170 as its immediate major resistance level.
Overall, while we go into the trade on Thursday, we need to have a look at two to three previous sessions. While the front line stocks, and the benchmark NIFTY50 consolidated while the broader Markets saw some good correction. Also, if we look at sector Indices, barring the ones like IT, majority have not made any major headway since November and are already into what is known as time correction with minor declines. Also, the NIFTY PCR (Put to Call Ratio) which touched nearly 1.90 has come down significantly and more so after the short covering that was seen in Wednesday’s session. With all this, we can conclude that though volatility is something that will certainly remain; we do not expect any major downsides unless something very nasty comes up in the Budget. We expect effective sector rotation happening with focus on sectors that will benefit from the Budget and Markets are likely to move on after knee-jerk reactions. Major downsides expected only if fundamentally nasty proposals are left to be digested by 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


Wednesday, January 31, 2018

MARKET OUTLOOK FOR WEDNESDAY, JAN 31, 2018

MARKET OUTLOOK FOR WEDNESDAY, JAN 31, 2018

The benchmark NIFTY50 suffered a modest down tick and saw some corrective pressure as it opened lower on Tuesday, made no attempts to recover and ended the day with net loss of 80.75 points or 0.73%. We may say that the pause in unabated rally in Equities was global in nature as the Asian and European Markets too saw modest corrective declines. Coming back to Indian Markets, while we go into trade on Wednesday, we expect such minor corrective pressure to persist as the Markets may adjust themselves before heading in to the Budget session on Thursday. We also expect market-wide volatility also to creep in and persist for some time which would include the front line Indices and the broader Markets as well.
Wednesday will see the levels of 11090 and 11165 playing out as immediate resistance area while supports will come in at 10990 and 10940 zones.
The Relative Strength Index – RSI on the Daily Chart is 72.8565. Though they remain modestly overbought, they stay neutral against the price showing no divergence against the price. The Daily MACD is still bullish. It currently trades above its signal line. No notable formations were seen on Candles.
Pattern analysis shows the Market taking a breather after a strong run-up. In most likelihood, we can expect the Index to consolidate while resisting to 11,170 levels. Unless there is resumption of rally fuelled by Union Budget, we will see this level of 11,170 acting as immediate top and the Markets resisting around those levels with limited downsides.
All and all, it would be no surprise if the Markets see themselves getting volatile ahead of Budget Session on Thursday. Some lightening and churning of positions is expected and this is likely to lead to volatile movements. Some intermittent profit taking bouts too cannot be ruled out. Though the downsides are expected to remain limited, we recommend reducing overall exposures to moderate levels. It is also advised to preserve cash which would enable the trades to take further definitive directional bias post Union Budget. Continuance of cautious outlook is advised for the day.
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


Tuesday, January 30, 2018

MARKET OUTLOOK FOR TUESDAY, JAN 30, 2018

MARKET OUTLOOK FOR TUESDAY, JAN 30, 2018
After a day or two of minor consolidation, the broader Markets resumed its up move on Monday with a gap up opening and scaling a bit higher in the session. The benchmark Index, NIFTY50, though came off a bit from the high point of the day, ended with net gains of 60.75 points or 0.55%. Though the frontline Markets performed well, the pain remained evident in the broader Markets. While we go into the trade on Tuesday, we expect these cracks in the broader Markets to persist for some time while the NIFTY attempts to scale higher. We continue to remain buoyant on the immediate outlook but also sound caution as gross under-performance in the broader Markets may remain for some time.
The levels of 11,155 and 11,235 will continue to remain immediate resistance area for the Markets. Supports come in lower at 11,105 and 11,065 zones.
The Relative Strength Index – RSI on the Daily Chart is 82.2992 and it remains in overbought territory. It also show a bearish divergence as while the NIFTY marked a fresh 14-period high, RSI did not do so. A white body emerged on Candles but it remains insignificant in the present context and structure of the Charts.
The pattern analysis show that the breakout achieved by NIFTY after moving past 10490-mark remains firmly in place. There are minor signs of fatigue at higher levels and given the overbought nature of the Markets, we need to take this with some caution.
Overall, there is no denial to the fact that the liquidity is chasing the momentum. However, the important point that draws our attention is that the smart money is chasing the large caps while the broader Markets has started to consolidate and show minor internal corrective cracks. We recommend remaining extremely cautious at current levels. Though traders are left with little option but to chase the momentum, this should be done with great care remaining highly selective while picking stocks. Cautious outlook is advised for the day.
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


Monday, January 29, 2018

MARKET OUTLOOK FOR MONDAY, JAN 29, 2018

MARKET OUTLOOK FOR MONDAY, JAN 29, 2018

The benchmark Index NIFTY50 saw less volatility than what was expected on the expiry day of the December series. However, it did see a modest corrective move in the first half of the session. However, the Index saw a 60-point recovery to end the day with a modest loss of 16.35 points or 0.15%. Markets will go into the trade on Monday with a long weekend following a trading holiday on Friday. Though the indicators are overbought all over, we expect the Markets to attempt a modestly positive opening once again. The Asian Markets, especially the Hang Seng ended with gains on Friday and we expected NIFTY will follow suit.
However, this being said, we cannot at any point ignore the overbought nature of the Markets and that fact that we will face one of the most important domestic event that of Union Budget later this week. The levels of 11110 and 11135 will play out as major resistance area for the Markets. Supports come in lower at 10965 and 10930 zones.
The Relative Strength Index – RSI on the Daily Chart is 80.5369 and it stay neutral against the price. However, it trades in the overbought territory. The Daily MACD remains bullish while trading above its signal line. A candle with a long lower shadow has emerged. This has little significance at current position but can temporarily halt an up move.
The pattern analysis shows that after breaking above the 10490-mark,  the NIFTY has achieved its measured targets and is now expected to take a minor breather with the level of 11,110 acting as immediate resistance.
Overall, though some early positive movement in the Markets cannot be ruled out, we might see some intermittent corrective bouts happening at higher levels. Broader markets may see some relatively more pain in event of any corrective activity taking place from higher levels. However, with the uptrend remaining firmly in place, we do not recommend creating any significant short positions. Instead, all sharp up moves should be continued to be utilized in protecting 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