Saturday, February 17, 2018

WEEKLY MARKET OUTLOOK FOR FEB 19 THRU FEB 23, 2018

WEEKLY MARKET OUTLOOK FOR FEB 19 THRU FEB 23, 2018


The last trading day of the Week saw the NIFTY taking a cut ending the day with net loss of 93.20 points or 0.88% on Friday. This has seen the benchmark Index ending the Week on a flat note losing just 2.65 points or 0.03% on weekly basis. Markets have decoupled themselves from the global markets but for the wrong reasons only when we saw stability returning in the global markets. Though we can take solace that fall in our Markets is arrested as we ended flat after losing 3% in each of the two previous weeks. But at the same time, we have grossly underperformed the global peers.
The most correlated Market – Hang Seng – ended the Week gaining 5.45%. Dow ended the Week gaining 4.25%. Nasdaq and S&P500 gained 5.31% and 4.30% respectively on a weekly note. The hit that the domestic Index took was much of sentimental nature. We have lot of catching up to do this coming week.
Subject to global markets remaining stable, we see Indian Markets approaching the week on a positive note and we may see stability returning to our Markets. The levels of 10750 will act as immediate resistance while supports will come in at 10250-10300 zones.
The Relative Strength Index – RSI on the Weekly Chart is 53.9947 and it has marked a fresh 14-period low which is bearish. It also shows bearish divergence as RSI has marked a fresh 14-period low while the NIFTY has not done so. Weekly MACD is bearish as it trades below its signal line. No significant formations were seen on Candles.
While having a look at pattern analysis, NIFTY is seen resting at the 20-period Moving Average on the Weekly Charts. Volumes are seen reducing each following week and this shows that selling is now trying to slow down and NIFTY still remains in the process of finding a bottom for itself.
We also approach the expiry of the current derivative series in the coming week. This will also see volatility remaining in the Markets but unless a fresh skeleton drops out of a cupboard, there are high chances of the Markets attempting to find bottom at current levels. However, until a confirmation is achieved, we will still recommend staying put with strategy of maintaining modest exposures while avoiding shorts and protecting profits at higher levels.
 A study of Relative Rotation Graphs – RRG shows that PHARMA stocks are steadily improving the relative performance and along with that, the IT pack is likely to distinctly out-perform the general markets. Apart from this, Metal stocks are showing stark improvement on both ratio and momentum and are likely to continue to strengthen its position and attempt to relatively outperform. FMCG too may perform week but some drop in momentum is observed. Apart from this, REALTY, NIFTY Next 50, and other broader Indices are seen losing momentum. No major show is expected from PSUBanks, BANKNIFTY, Public Sector Enterprises, ENERGY and INFRA pack. Some minor stock specific out-performances may be seen in Media stocks.
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 16, 2018

MARKET OUTLOOK FOR FRIDAY, FEB 16, 2018

MARKET OUTLOOK FOR FRIDAY, FEB 16, 2018


Markets had a session defined with limited range on Thursday. The benchmark Index NIFTY50 enjoyed a modestly positive start and in the late morning trade inched higher. The 50-DMA acted as resistance for the Markets as the NIFTY came off from its highs and ended the day with modest gain of 44.60 points or 0.42%. There was no volatility as such but currently the NIFTY remains trapped in between its 50-DMA and the 10480-10500 support zone which is followed by 100-DMA on the downside.
Going into trade on Friday, we continue to expect a modestly positive and quiet start to the trade. Just as we mentioned in our earlier note, the behavior of the Markets vis-à-vis the 10480-10500 zone would be important to watch for. NIFTY will have to remain above the 10500 mark to avoid any more weakness from creeping in. Presents, the NIFTY trades without any directional bias post recent corrective declines.
The levels of 10580 and 10635 will act as immediate resistance levels for the Markets. Supports will come in at 10480 and 10410 zones.
The Relative Strength Index – RSI on the Daily Chart is 43.2847 and it remains neutral showing no divergence against the price. The Daily MACD stays bearish while trading below its signal line. No significant formations occurred on Candles.
Pattern analysis reveals little uneasy picture as the Markets are just managing to hang on above the 10480-10500 support zone. It is important to remain above this level as any breach of this support zone will increase the possibility of the NIFTY testing the 100-DMA levels.
Markets are exhibiting tentative approach and we need to address this situation with some caution. Until the NIFTY stays comfortably above the 10480-10500 zones and gradually moves past 50-DMA which is currently at 10584, it will remain vulnerable to profit taking bouts from higher levels. We reiterate our advice to tread the Markets with caution, and avoid taking lopsided exposures with either directional bias. They way dips should be utilized to make quality purchases, profits too need to be guarded at higher levels until a confident directional bias is established again.
STOCKS TO WATCH:
Long positions were seen being added in STATE BANK OF INDIA, YES BANK, ICICI BANK, ASHOK LEYLAND, ITC, POWERGRID, VEDANTA, EQUITAS and INFIBEAM. Unwinding was seen on counters like RPOWER, SYNDICATE BANK, SOUTH BANK, GMRINFRA, RELIANCE CAPITAL, CANFIN HOMES, ESCORTS and ADANI ENTERPRISES.

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 15, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 15, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 15, 2018

Indian Equity Markets took a hard sentimental hit in the last hour of the trade. The benchmark NIFTY50 traded in a limited range all throughout the session on Wednesday but the last hour saw it lose ground rapidly. Though, post settlement, it ended the day with just a modest loss of 38.85 points or 0.37%. While we go into trade on Thursday, there are couple of things that will be important.
The vulnerability of NIFTY around the support zone of 10480-10500 level is a cause of worry for the Markets. We expect a quiet start to the Thursday’s session but the opening levels and the behavior of the Markets vis-à-vis the 10500-mark will be important to watch for. Any significant breach of the support zone of 10480-10500 at Close levels will increase the possibility of the Markets testing its 100-DMA once again.
The Relative Strength Index – RSI on the Daily Chart is 40.3059. It stays neutral showing no divergence against the price. The Daily MACD stays bearish while trading below its signal line however it continues narrowing its trajectory.  An Engulfing Bearish candle has emerged. Since this has occurred during a downtrend, this has significance. It means that this can be a last engulfing candle and indicates a potential bottom formation.
While having a look at pattern analysis, it appears that NIFTY is struggling hard to form a base after forming a recent low of 10276 and there are high probabilities that this low will not be violated and the 100-DMA will remain defended at close levels in event of weakness, if any.
All in all, we expect a quiet start and the behavior of the Markets vis-à-vis 10500-mark will be crucially important. There are high probabilities that despite any short term hiccups, the recent lows are not likely to be violated. We continue to recommend utilizing dips in making purchases as sector-specific outperformance will remain evident. However, given the current volatility persisting in the Markets, we also recommend keeping overall exposures at modest 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


Wednesday, February 14, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 14, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 14, 2018

Equity Markets had a relatively stable session on Monday. The benchmark Index NIFTY50 opened higher and stable, inched up further towards the end and ended the day with net gains of 84.80 points or 0.81%. Markets will open after a gap as Tuesday was a trading holiday. As w e go ahead into the trade on Wednesday, we expect the Markets to open on a positive note and continue with its pullback. NIFTY has maintained itself above 10480-10500 mark and this level will remain critical short term support. However, this remain a isolated reading with a caveat that the noting major is abruptly wrong with global indices overnight.
Wednesday will see the levels of 10570 and 10635 playing out as immediate resistance area for the Markets. Supports come in at 10480 and 10410 zones.
The Relative Strength Index – RSI on the Daily Chart is 41.9340. It remains neutral showing no divergences against the price. The Daily MACD remains evidently bearish while trading below its signal line but it is seen flattening its trajectory. A rising window emerged on Candles. This essentially implies a gap up and continuation of the up move, though it needs confirmation on the next trading day.
Pattern analysis indicate that the NIFTY has so far held and defended the 100-DMA and has taken supports at this important support area on Closing basis. The lower Bollinger band and the 100-DMA merge and this area collectively can act as major support area for the Markets in the immediate short term.
Overall, we expect the pullback to continue to Wednesday with a caveat that there is nothing wrong globally overnight. Having said this, we expect the NIFTY to move towards 10700-10750 zones over coming days. The F&O data too suggests that fresh longs are created with any volatile dip and all up moves and pullbacks have occurred with addition in OI which show addition of fresh long positions. We recommend continuing making fresh purchases and utilize all dips as buying opportunities. Positive and stable outlook 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, February 12, 2018

MARKET OUTLOOK FOR MONDAY, FEB 12, 2018

MARKET OUTLOOK FOR MONDAY, FEB 12, 2018

Friday’s session had seen a lower opening on back of overnight rout in US Markets once again but the Indian Markets resiliently limited its losses. Even with the resilient performance, the benchmark NIFTY50 ended the day on Friday with net loss of 121.90 points or 1.15%. If we take a singular and isolated reading of domestic technicals, the NIFTY has slipped below the 10500-mark. We are likely to see a positive opening as the Index has ended at its intraday high point and has piled up huge Open Interest leading to likely short covering on Monday.
However, we cannot take a isolated reading as we remain affected by global happenings. Even if we take a look globally, US Markets saw wild swings on Friday night, after swinging 800 points on either side, ended with a gain of 330-points. This is further likely to aid a possible positive opening on Monday.
Monday will see the levels of 10565 and 10630 playing out as immediate resistance area. Supports are expected to come in at 10430 and 10350 zones.
The Relative Strength Index – RSI on the Daily Chart is 36.7560. This time a Bullish Divergence is observed as the NIFTY set a fresh 14-period low while RSI did not do so. The Daily MACD still remains bearish while trading below its signal line. No significant formations were seen on Candles.
While having a look at pattern analysis, the NIFTY50 has slipped marginally below the immediate support of 10480-10500 zones. However, it has successfully held 100-DMA which stands at 10371.
Overall, it would be technically important for the Markets to crawl up and move past 10500-mark. It would be necessary to move past this 10500-mark to avoid any further weakness. Much of the venom in the system is seen out for the immediate short term. However, volatility is likely to remain we will see Markets oscillating in a defined range. We reiterate to keep exposures at modest levels and continue to buy good quality stocks with corrective dips, if any. Shorts should be avoided while maintaining a cautious outlook 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