Saturday, February 10, 2018

WEEKLY MARKET OUTLOOK FOR FEB 12 THRU FEB 16, 2018

WEEKLY MARKET OUTLOOK FOR FEB 12 THRU FEB 16, 2018
Just like the previous week, this week also ended on a dismal note with the benchmark NIFTY50 ending with net loss of 305.65 points or 2.84%. The week before this had also seen the Index losing 309.05 points. Therefore, the two weeks that have gone by have seen NIFTY shaving off 614-odd points. The reasons that we can attribute to this were, however, different. Earlier, we had Union Budget and the introduction of LTCG to blame. But this time, it was pure global technical selloff that caused the damage. However, in the same breath, it would be important to note that the Indian Markets remained distinctly resilient and we outperformed the global peers who lost nearly 10%.
Going into next week, we have just four working sessions with Tuesday, 13th being a trading holiday. This truncated week is likely to see the levels of 10750 resisting the upside. The downsides will have strong support at the previous week’s low of 10276. We will see volatility refusing to go away as well.
The Relative Strength Index – RSI on the Weekly Chart is 54.0688 and it has marked a fresh 14-week low which is bearish. Also, a bearish divergence is observed as the Weekly RSI has set a fresh 14-week low while the NIFTY has not done so. The Weekly MACD has reported a negative crossover and it is now bearish while trading below its signal line. A falling window occurred on Candles. This is usually a gap on the downside and usually implies continuation of some downsides. But this requires confirmation and should not be read singularly.
The pattern analysis shows the NIFTY sharply correcting after attempting to break out of a 24-month long upward rising channel. Presently, it has continued to stay within this 24-month long trading channel and has not broken out. Apart from this, it shows no structurally breach on the Weekly Charts.
All in all, while we go ahead into the trade in a truncated week, we do not see any runaway pullback happening. However, at the same time, we also do not see the Markets breaching the previous weekly lows of 10276 as well. However, this reading will hold true only if we read the domestic technical factors in isolation. But there is always a caveat. We will not remain unaffected if the global selloff continues. But one thing is for sure that we will remain much more resilient to the global weakness, if any. NIFTY has shown all signs of successfully forming a base in the near term and will see select sectors distinctly out-performing the general Markets.
A study of Relative Rotation Graphs – RRG shows that despite remaining in the Weakening quadrant, the METAL pack is likely to gather strength and attempt relative out-performance in the coming week. REALTY, MEDIA, and MIDCAP are seen losing momentum rapidly despite remaining in the leading quadrant. We are likely to see FMCG, SERVICES, PHARMA and IT continue to remain resilient and relatively outperform.  We do not see any notable performance coming in from other sectors like PSE, BANKNIFTY, FINANCIAL SERVICES, along with broader Indices. INFRA pack may positively consolidate.
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 9, 2018

MARKET OUTLOOK FOR FRIDAY, FEB 09, 2018

MARKET OUTLOOK FOR FRIDAY, FEB 09, 2018

Thursday’s session remained on the expected lines as the benchmark NIFTY did enjoy a strong opening and also fiercely attempted to find and maintain base around current levels. Though the NIFTY retraced nearly 100-points from the high of the day, it recovered again and ended the session with a decent gain of 100.15 points or 0.96%. NIFTY has successfully defended its 50-DMA at Close levels as of now and has also maintained itself above the 10480-500 zones keeping hopes of a recovery alive.
We expect a positive opening once again on Friday. The intraday corrective move that was witnessed on Thursday put and the recovery that followed makes the base stronger for the Markets under usual circumstances. The levels of 10635 and 10680 will play out as immediate resistance levels while the supports will come in at 10480 and 10410 mark.
The Relative Strength Index – RSI on the Daily Chart is 41.7223 and it stays neutral showing no divergences against the price. The Daily MACD stays bearish as it trades below its signal line but it may flatten its trajectory in coming days if downsides get arrested. No significant formations were observed on Candles.
While having a look at pattern analysis, it is evident that the NIFTY pulled back sharply after intraday lows that tested the 100-DMA. At Close levels, it has defended both 100-DMA and 50-DMA as well.
Overall, we still feel that volatility may continue to persist for some time. However, select sectors have already started to outperform on expected lines and will continue to do so on Friday as well.  Also it is important to note that the intraday corrections and the recovery from that make the Markets healthier and light in terms of open positions. We expect that the Markets may attempt some more upsides with the only caveat that the levels of 10500 should be defended. Any breach of this level will bring in temporary weakness.
We recommend keeping overall exposures moderate until the Markets restores its upward directional bias.
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 8, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 08, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 08, 2018

In our previous note, we had mentioned about high possibility of the Markets attempting to find a base and had also expressed high possibility the Markets may also remain bit volatile and still continue to oscillate in a range. The benchmark NIFTY50 enjoyed a relatively strong opening on Wednesday but gave up all of its gains and ended the day with a modest loss of 21.55 points or 0.21%.  Going into trade on Thursday, there are high probabilities that the Markets may again enjoy a positive opening. However, sustenance of the good start, if any, and the behavior of the Markets vis-à-vis the levels of 10500-mark will be crucial to watch for.
 The levels of 10590 and 10630 will play out as immediate resistance area for the Markets. Supports come in at 10450 and 10410 zones.
The Relative Strength Index – RSI on the Daily Chart is 35.0248 and it has formed a fresh 14-period low which is bearish. The Daily MACD is still bearish as it trades below its signal line. On the Candles, a black body emerged. In the present scenario, it does not result into any significant formation.
The pattern analysis shows that NIFTY is making evident efforts to form a bottom in the present area. After occurrence of a big white body near the 100-DMA support area, the following session resulted into a higher top and bottom. However, it would be important for the Markets to remain above the 10500-mark to attempt any pullback.
The 10480-10500 zone represents an area wherein the NIFTY struggled quite a bit in the last quarter of 2017. Therefore, while correcting from the recent highs, these levels are expected to lend support at some point of time. Therefore, the behavior of the Markets against the 10500-mark will be crucial. For any technical pullback to occur, it would be important for the Markets to remain above this mark. A bullish divergence is observed on the Daily Chart over Stochastic. Though this cannot be read singularly in isolation, it certainly exhibits attempts by the Markets to find a base. We reiterate continue making select purchases with every corrective move while adopting a 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


Wednesday, February 7, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 07, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 07, 2018

Markets had a much worse-than-expected and dismal start to the trade on Tuesday. The opening was a big gap down following a overnight rout in the equity markets that had started from US. The opening of NIFTY was much in line with the Asian peers which were trading 3% to 4% lower. However, post such weak opening, Indian Markets grossly out-performed on relative basis with the Asian peers as it recovered nearly 200-points from the low point of the day. The NIFTY validated 100-DMA as its support and it has formed potential base in the 10250-10300 zone.
Going into trade on Wednesday, we can still expect some modest negativity in the initial trade. However, the levels of 10450 and 10375 will play out as major support unless some drastically goes wrong with the global markets overnight. On the higher sides, Markets may find resistance at 10545 and 10610 zones.
The Relative Strength Index –RSI on the Daily Chart is 35.8479 and it has marked a fresh 14-period low which is bearish. The Daily MACD is bearish while trading below its signal line. On Candles, a big white body has occurred. In the present circumstance, it has occurred near the 100-DMA area and therefore, it has marked 100-DMA as a potentially strong bottom for the NIFTY
Pattern analysis show that Markets have returned majority of its gains that it achieved after breaking out from 10200-mark.
It is also important to observe that present weakness in equities is global in nature and has nothing to do with any domestic reasons. Because of this, such global corrections remain short term in nature. In past, whenever there have been such synchronized global correction, they have remained very short lived. While they last, the domestic markets have typically decoupled themselves while attempting to out-perform the peers on relative basis.
Overall, though a likely base has been formed, we may not find the Markets showing a sharp one way relief rally. We expect some volatility to persist and some oscillations to happen before a definite base has been formed. All this is presuming there is no overnight continuation of any major weakness in the global markets. At this juncture, we would like to reiterate that this is nothing but a bull market correction and the primary uptrend still remain in place. We strongly recommend utilizing all such opportunity to make portfolio purchases. Traders are advised to preserve cash and also make some modest selective purchases at lower 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


Tuesday, February 6, 2018

MARKET OUTLOOK FOR TUESDAY, FEB 06, 2018

MARKET OUTLOOK FOR TUESDAY, FEB 06, 2018

The session on Monday remained much on expected lines. The Markets opened lower in line with global weakness but did not breached its opening lows and ended with net loss of 94.05 points or 0.87%. The benchmark NIFTY50 came off nearly 80-odd points from the lows of  the morning. In our previous note, we had mentioned above NIFTY attempting to form a base around current levels. In line with this reading, NIFTY did fiercely attempt to form a base in the 10550-10650 zones. The selling was present in Monday’s session but was not an indiscriminate one and select pockets grossly out-performed the general Markes.
Going into trade on Tuesday, we see a quiet to modestly positive start to the trade. With the levels of 10710 and 10765 acting as resistance, we expect a pullback that began from lows of Monday to continue. Supports exist at 10610 and 10550 zones.
The Relative Strength Index – RSI on the Daily Chart is 43.2131 and it has marked a fresh 14-period low which is bearish. It does not show any divergence against the price. The Daily MACD stays bearish while trading below its signal line. On Candles, a falling window occurred. However, in the present nature of formation, it holds little significance.
The pattern analysis shows NIFTY attempting to form a base around 10550-10650 zones. This zone is likely to act as strong support base as this was the point from where the Markets had initiated its latest upmove.
All in all, we expect the Markets to consolidate its present status and find a bottom. It is also important to note that the current correction is because of not just domestic factors or out of reactions to Union Budget but also a part of global risk-off that is taking place. We recommend preserving cash and utilize all dips to make quality purchases. We expect that sectoral out-performance will continue. Though volatility might continue to purchases, good quality stocks will find bargain buying at lower 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


Monday, February 5, 2018

MARKET OUTLOOK FOR MONDAY, FEB 05, 2018

MARKET OUTLOOK FOR MONDAY, FEB 05, 2018

The session on  Friday following the Union Budget remained quite ugly as the Markets refused to digest proposals like LTCG coming in while STT not going away. Taking shelter under such reasons, the Markets, which were anyway showing signs of fatigue over last couple of days took a deep cut as the benchmark NIFTY ended the day with net loss of 256.30 points or 2.33%. The broader Indices took even deeper cuts losing anywhere between 4% to 10%. Going into trade on Monday, we expect a modestly negative and volatile start to the trade. There has been global corrective mood in the Equities and this may affect Indian Markets as well over and above the domestic reasons.
However, having said this, we expect that a percentage here or there, we may see NIFTY attempting a temporary formation of base anytime soon. The levels of 10830 and 10880 might act as resistance on the way up, supports exist a 10700 and 10645 zones.
The Relative Strength Index – RSI on the Daily Chart is 48.3699 and it has formed a fresh 14-period low which is bearish. Also, a bearish divergence is seen as the RSI has formed a fresh 14-period low while the  NIFTY has not yet. Daily MACD has reported a negative  crossover and it is now bearish trading below its signal line. A big black candle that has emerged gives credibility to the resistance area of 11000-11170 zones.
Pattern analysis shows that NIFTY as taken a sharp breather and has formed a temporary top in the 11000-11170 zones. It has also slipped below its short 20-DMA and might take some time to form a base and consolidate to resume its up move.
All in all, there might be some short term turbulence that might persist in the Markets. However, downsides should get arrested from one or one and half  percentage point from current levels. While this happens and Markets prepares to move up again, a tactical shift is expected to sectors like Infra, select pack of Auto, Media etc. Lot of portfolio churning is expected and we will see distinct out performance in select stocks. With Markets dominantly above its 50, 100 and 200-DMA, there is no reversal of trend. This is a disruption in primary trend and dips should be used to make portfolio purchases.
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