Thursday, February 22, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 22, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 22, 2018


Despite getting a better than expect start to the trade, the Indian equity markets failed to capitalize on the positive opening on Wednesday. After opening higher, the NIFTY pared all of its opening gains and remained lackluster for the major part of the session. It was only the last hour of the trade that saw some minor upsides. The benchmark Index ended with modest gains of 37.05 points or 0.36%.
Thursday is likely to see a quiet but positive start to the trade. Also, we enter the expiry day of the current derivative series and we will see the session remain heavily dominated with rollovers. We also expect a volatile trade tomorrow as the expiry has coincided with the Markets attempting to find base at current levels.
The levels of 10465 and 10490 will act as immediate resistance levels for the Markets. Supports come in at 10310 and 10275 zones.
The Relative Strength Index – RSI on the Daily Chart is 38.0586 and it remains neutral. It is also seen taking a pattern support and is inching higher. The Daily MACD stays bearish but it has started to narrow its trajectory. No significant formations were observed on Candles.
While having a look at pattern analysis, it is encouraging to see the NIFTY has as of now successfully defended the support of 100-DMA at Close levels. Some minor slip below this crucial support was seen but NIFTY stayed within its filter as of now and defend this crucial support.
All in all, we expect this struggle of NIFTY to defend the support of 100-DMA to continue. Also, in the same breath, good amount of shorts exists in the system. We observe that if  the Markets do not breach its immediate supports, we may see short covering being triggered. We strongly recommend to avoid shorts as short trap may occur. There will be significant downsides only if the NIFTY ends below 10275-10300 zones but until then, liquidity should be preserved and all dips should be used in picking quality stocks. Cautious but positive outlook is advised for the day.
STOCKS TO WATCH:
Resilient technical setup is seen in stocks like SCHNEIDER ELECTRIC, RELIANCE, TECH MAHINDRA, FIRST SOURCE SOLUTIONS, AXIS BANK, JAIN IRRIGATION, DHFL, FUTURE CONSUMER, MIND TREE and TV18 BROADCAST.
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 21, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 21, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 21, 2018

After remaining range bound with modest gains for most part of the session on Tuesday, the benchmark NIFTY50 pared its gains rapidly in the last hour of the trade. It ended negative losing 18 points or 0.17%. Going into trade on Wednesday, we enter the penultimate day of expiry of current derivative series. We expect a tepid start to the trade and also expect volatility to remain ingrained in the session.
In our previous note, we had elaborated on the behavior of the Markets vis-à-vis the levels of 100-DMA and the support zone of 10300-10276. Wednesday’s market analysis will remain no different. NIFTY has ended a notch below 100-DMA mark  which stand at 10398. But it has remained within its filters and its behavior vis-à-vis the support zone of 10276-10300 would be extremely crucial.
The levels of 10395 and 10450 will play out as immediate resistance area for the Markets. Supports come in at 10310 and 10275 zones.
The Relative Strength Index – RSI on the Daily Chart is 35.4477. It has once again shown a Bullish Divergence against the NIFTY. NIFTY has formed a fresh 14-period low while RSI has not done so. Daily MACD stays bearish trading below its signal line. No significant formation were observed on Candles.
While having a look at pattern analysis, NIFTY failed to clear the resistance area of 10480-10500 and while retracing from those levels, also slipped below the 100-DMA mark of 10398. However, it stays within its filter and trades near important short term support zone.
Overall, if we take a extremely short term view, persistent Bullish Divergences on the lead indicators reflect the struggle and the attempts of the NIFTY to find a  base around current levels. However, for this to happen, it will have to move past the 100-DMA mark comfortable and advance further towards 50-DMA. Unless this happens, NIFTY will remain at the mercy of the immediate support zone of 10300-10275. Any breach of this will bring in fresh weakness. There are large numbers of shorts opening up in the system. Looking at this input and coupled with the fact that NIFTY currently trades near to its short term support, we do not recommend opening fresh aggressive shorts in the Markets. We recommend staying away from creating major exposures and continue to make select quality purchases in select sectors wherein relative out-performance will be seen.
STOCKS TO WATCH:
Long positions were seen being added in STATE BANK, DISHTV, VEDANTA, ASHOK LEYLAND, ONGC, TATA MOTORS, EQUITAS, NMDC, JSW STEEL, HINDALCO and AMBUJA CEMENT.

(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


Tuesday, February 20, 2018

MARKET OUTLOOK FOR TUESDAY, FEB 20, 2018

MARKET OUTLOOK FOR TUESDAY, FEB 20, 2018

Start to the fresh week for the Indian Markets remained dismal as the NIFTY continued its corrective mode. It slipped below 100-DMA mark of 10390 on traday basis. However, short covering pulled the Index up by nearly 80-odd points and the NIFTY finally ended the day losing 73.90 points or 0.71%. Going into trade on Tuesday, NIFTY will have limited global cues to track. Major Asian Markets like Hang Seng, Taiwan and Chine remained shut due to lunar week and US Markets will remain shut on Monday due to President day holiday.
Tuesday’s trade is likely to see a tepid opening. If we look from the technical point of view, though the level of 100-DMA was compromised intraday, the NIFTY has defended it by closing just a notch below it. It would be very important for the Markets to crawl back above the 100-DMA mark to be in the safe trajectory.
While we see the levels of 10465 and 10490 playing out as immediate resistance area, very important support zone exists in the 10275-10310 zones.
The Relative Strength Index – RSI on the Daily Chart is 36.1349 and it shows Bullish Divergence as yet again as the NIFTY marked a fresh 14-period low while the RSI did not. The Daily MACD continues to stay bearish while trading below its signal line. No significant formations were seen on Candles.
Pattern analysis shows NIFTY significantly breaching the 10480-10500 support area today. The low was marked at 10308 on Monday after which the NIFTY see significant recovery from lower levels. If we calculate the filters, the levels of 100-DMA has been defended at Close levels.
All in all, the volatility will continue to heavily persist while we approach the expiry. In event of any downsides persisting, the Monday’s low of 10308 and the previous low of 10276 will remain extremely crucial. Any breach will bring in significant weakness. However, we also cannot ignore the fact that large amount of shorts exists in the system. If the NIFTY does not breach the 100-DMA for too long and more so at Close levels, some short covering may get induced. We recommend refraining from shorts as it may create short trap at lower levels. Selective out-performance will continue. We recommend avoiding shorts, keeping exposures at very modest levels and adopt cautious approach to the Markets.
STOCKS TO WATCH:
Fresh shorts were seen on counters like SUZLON, IDFC BANK, SOUTH BANK, ICICI BANK, ADANI POWER, T V18 Broadcast and FEDERAL BANK. Longs were seen being added IDFC, DHFL, RELIANCE, AXIS BANK, YES BANK, INFY, AMBUJA CEMENT and VEDANTA.


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 19, 2018

MARKET OUTLOOK FOR MONDAY, FEB 19, 2018

MARKET OUTLOOK FOR MONDAY, FEB 19, 2018

Indian Equity Markets had a dismal session on Friday. While decoupling from the global markets for all the wrong reasons, the NIFTY came off 178-points from the high point of the day to end the day with a net loss of 93.20 points or 0.88%. Looking from a technical view point, the NIFTY failed to sustained itself above 50-dMA which stands at 10590. On the other hand the Index also drifted below the 10480-10500 support zones.
Monday's opening will be crucial for the Markets. Global markets have been stable and if we see NIFTY sailing past the 10500-mark on Monday, we will see the Index bank into the trading range. However, failure to move past 10500-mark will mean increased possibilities of the NIFTY testing its 100-DMA which stand at 10388.
Monday will see the levels of 10500 and 10565 will see themselves playing out as immediate resistance levels for the Markets. Supports come in at 10430 and 10385 zones.
The Relative Strength Index – RSI on the  Daily Chart is 39.0182. It shows a Bullish Divergence as while NIFTY formed a fresh 14-period low, the RSI did not. The Daily MACD too is seen narrowing its trajectory while trading below its signal line. Engulfing Bearish pattern has emerged on Candles. Since it has emerged during an downtrend, it can potentially mark a temporary bottom. However, this formation cannot be read in isolation and it requires confirmation on the following day.
While having a look at pattern analysis it is a matter of concern that the 50-DMA levels have proved to be resistance levels for the Markets. Also, the support zone of 10480-10500 has been compromised to some extent on Friday.
The damage that we saw on Friday was more of sentimental in nature. With global picture in place and stability prevailing in the global markets, we do not see NIFTY breaching the 100-DMA mark as easily as significant shorts is seen in the system. Also we enter the expiry week beginning Monday and some short covering can  be expected if the NIFTY does not breach the 100-DMA mark. We would still recommend avoiding shorts, preserving liquidity and holding only modest exposures until a confirmed bottom is formed. Stock specific out-performances are likely to continue.
STOCKS TO WATCH:
Resilient technical set up is seen in stocks like JSW STEEL, CG POWER, INFOSYS, BHARAT PETROLEUM, BIOCON, ACC, NATCO PHARMA, EMAMI LIMITED, M M FORGINGS, JP ASSOCIAT, VEDANTA  and WANBURY.


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