Gemstone Equity Research & Advisory Services: 3/11/18

Saturday, March 17, 2018

WEEKLY MARKET OUTLOOK FOR MAR 19 THRU MAR 23, 2018

WEEKLY MARKET OUTLOOK FOR MAR 19 THRU MAR 23, 2018

In our previous Weekly Note, we had mentioned that the Markets remain on tenterhooks and it would be extremely crucial for the NIFTY to remain above the crucial 10275-10300 pattern supports. The session on Friday wiped out the gains in its entirety and the benchmark NIFTY ended the week with a net loss of 31.70 points or 0.31%. Looking at this Weekly figure, it does not suggest any serious weekly loss but the manner in which the volatility ruled the roost all through the week; this certainly remains a cause of worry for the Markets.

While we approach the coming week, we brace ourselves to deal with two very critical and crucial levels. One is the 200-DMA on the Daily Charts which stand at 10161 and two; we also approach the 27-month long upward rising trend support line which stands at 10000-10040 range. This also coincides with the 50-Period Moving Average on the Weekly Chart which stands at 10024.

With the kind of sentimental damage that we are groping with off late, we do not completely rule out some more intermittent selling bouts, but we also believe the zones of 10040-10160 to act as rock-solid support are and we do not expect this support zone to be easily and comprehensively broken. On the upside, NIFTY faces resistance at 10300 and 10390 zones.

The Relative Strength Index – RSI on the Weekly Chart is 46.3042 and it has marked its lowest value in last 14-weeks which is bearish. Daily MACD stays bearish while trading below its signal line. No significant observations were observed on Candles.

If we have a look at pattern analysis, NIFTY still remains inside the 27-month long upward rising channel. The lower rising trend line – the support line remains in very close vicinity of the current value of NIFTY and is expected to act as a strong pattern support for the NIFTY.

We also need to review the present technical situation of NIFTY from a different perspective. Though however strong support that the zone of 10040-10160 may provide to the NIFTY, any breach of these levels will see some prolonged pain getting initiated in the Markets. However, also looking at the present set up and the F&O data, such significant breach below the mentioned support seems unlikely at present. By the time Markets find support for itself, we reiterate staying away from creating any major positions while continuing to adopt a very cautious view on the Markets.

A study of Relative Rotation Graphs – RRG this week show that the IT Pack has shown resilient behavior and this week as well is likely to out-perform NIFTY on relative basis. Along with this, it would also be safe to take refuge in sectors like FMCG, Services Sector, Financial Services, BankNIFTY to some extent and ENERGY who are seen improving their relative momentum against the general markets. Apart from this, very select stocks from Media and METAL pack might see good performance. Apart from this, we do not expect any eye-caching performance from AUTO, INFRA, PHARMA, SMALL CAP Universe, PSEs and REALTY pack.

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, March 16, 2018

MARKET OUTLOOK FOR FRIDAY, MAR 16, 2018

MARKET OUTLOOK FOR FRIDAY, MAR 16, 2018

The session on Thursday turned out to be much on expected lines as the NIFTY headed nowhere for the major part of the trade while remaining in much capped range. However, end of the session remained little sluggish than expected as the NIFTY ended the day with net loss of 50.75 points or 0.49% while adding fresh short positions.

Overall, we will continue to see the Markets continuing to consolidate and spend some more time remaining subdued before it prepare itself to move past 100-DMA levels. We are expected to see quiet to mildly positive start to the trade on Friday. However, NIFTY is neither expected to move past 100-DMA nor it is likely to breach any major support area.

Friday will see the levels of 10395 and 10475 playing out as immediate resistance levels. Supports come in at 10345 and 10275 zones.

The Relative Strength Index – RSI on the Daily Chart is 44.8813 and it continues to remain neutral showing no divergence against the price. The Daily MACD stays bullish as it continues to trade above its signal line. No significant formations were observed on Candles.

Pattern analysis reveals the credibility of the resistance area of 100-DMA as the NIFTY has resisted at those levels. Also it shows and has established the support zone of the 10275-mark followed by the 200-DMA of the Markets. Presently it continues to trade in a rectangle formation which translates into a broad trading range.

All and all, it is all likely that the NIFTY continues to oscillate and consolidate a bit more before it prepares for a fresh up move. In this process, the support of 10275-mark will be critical area to watch for. The F&O data which continues to show addition of shorts reiterates the limited downsides for NIFTY. Also, taking into account the performance of the broader indices and sector indices, it is evident that the Markets continue to exhibit positive bias. We reiterate avoiding shorts in the present scenario. Minor downsides cannot be ruled out but overall, this will be nothing more than some more consolidation which is ultimately likely to resolve itself with a directional bias on the upside.

STOCKS TO WATCH:

Fresh long positions were seen being added in stocks like IDFC BANK, COAL INDIA, RECLTD, DLF, ICICI BANK, L&TFH, ARVIND, NATIONAL ALUMINIUM, ASIAN PAINTS, EQUITAS, RPOWER and INFRATEL.

(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)

Thursday, March 15, 2018

MARKET OUTLOOK FOR THURSDAY, MAR 15, 2018

MARKET OUTLOOK FOR THURSDAY, MAR 15, 2018

Wednesday’s session remained a day for severe consolidation for the Markets. The Markets saw a negative opening, dipped lower in the first half of the session and then recovered over 75-points from the low point of the day. The NIFTY still ended the day with minor loss of 15.95 points or 0.15%. NIFTY continued to consolidate near its 100-DMA and has also deliberated there and halted its pullback on expected lines. Currently, it remains in a trading zone without any directional bias and it is likely to remain this way for some more time.

As we approach Thursday’s trade, the way the NIFTY is unlikely to breach its pattern low of 10275-mark, it is also unlikely to give a runway up move. In all likelihood, it may continue to consolidate before it prepares to move past the 100-DMA which rests at 10458.

The levels of 10450 and 10485 will act as immediate resistance levels for the Markets. Supports come in at 10365 and 10320 zones.

The Relative Strength Index – RSI on the Daily Chart is 47.4862. This indicator remains neutral showing no divergence against the price. The Daily MACD stays bullish as it trades above its signal line. A long lower shadow occurred on Candles. However, in the present context and looking at the place it occurred, it remains insignificant to draw any conclusions for it.

The pattern analysis continues to show NIFTY in the trading range. This range is formed with the lower range support of 10275 and upper range extending itself 10600 with the levels of 100-DMA lying exactly in between.

Overall, it is beyond doubt that the NIFTY tested its 100-DMA and showed minor corrective tendencies after that. However, it clearly continues to exhibit the underlying positive bias. Also, the broader Market Indices have continued to show resilience while the sectors chose to consolidate. We expect such range bound consolidation to continue. However, we also expected that despite some amount of volatility and some continued consolidation, there are greater chances of NIFTY moving past the 100-DMA mark at close in short time. We continue to reiterate a cautious but positive outlook in the Markets for the immediate short term.

Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)

Wednesday, March 14, 2018

MARKET OUTLOOK FOR WEDNESDAY, MAR 14, 2018

MARKET OUTLOOK FOR WEDNESDAY, MAR 14, 2018

In what seemed to be a quiet continuation of an up move, the Markets turned volatile in the last hour and half of trade and ended up closing on a flat note. The benchmark NIFTY ended the day with a gain of 5.45 points or 0.05% after coming off nearly 100-points from the intraday high and then recovering 50-points before closing.

From the Tuesday’s trade, we can draw inference that the NIFTY chose to consolidate after it resisted to the 100-DMA which stands at 10456. NIFTY failed to penetrate these levels at Close and this levels hold out as resistance for the immediate short term.

While we approach Wednesday’s trade, there are chances that we see a modestly positive start to the trade once again. However, despite chances that NIFTY may attempt to move past its 100-DMA, it would be technically important for it to Close above the levels of 100-DMA.

Wednesday’s trade is likely to see levels of 10460 and 10515 playing out as resistance are for the Markets. Supports come in at 10410 and 10350 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.3044 and it continues to remain neutral against the price showing no divergences of any kind. The Daily MACD has turned positive. It has reported a positive crossover and it is now bullish while trading above its signal line. No major formations were observed on Candles.

IF we look at pattern analysis, with the NIFTY pulling itself above the 10275-10300 zones, it has now once again entered the trading zone. Also, it has re-established the level of 10275 as its immediate important pattern support followed by the 200-DMA.

All in all, we might see some consolidation happening near the 100-DMA mark but overall the Markets are likely to exhibit a positive bias in the trade. There might be some volatility getting ingrained once again and we might see this volatility playing out as well if the NIFTY deliberates near its 100-DMA. If the resistance persists near the 100-DMA mark for some time, it might result into some volatile profit taking bouts. However, until the NIFTY trades above the 10275-mark, all these dips should be utilized to make select purchases. While avoiding shorts and keeping overall positions moderate until a upward directional bias is established, continuance of positive outlook is advised for the day.

STOCKS TO WATCH:

Shorts were seen being added on counters like TCS, VEDANTA, INFOSYS, COAL INDIA, DABUR, BHEL, ARVIND, CASTROL INDUSTRIES and HINDALCO. Fresh longs were observed in stocks like CGPOWER, STATE BANK, ASHOK LEYLAND, RCOM, FEDERAL BANK, TV18 Broadcast and NCC.

(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)

Tuesday, March 13, 2018

MARKET OUTLOOK FOR TUESDAY, MAR 13, 2018

MARKET OUTLOOK FOR TUESDAY, MAR 13, 2018

Much on the expected lines, the Indian Equity Markets saw a very strong relief rally today as the benchmark Index NIFTY opened above its critical resistance area of 10275-10300 and moved up further. In Monday’s trade, NIFTY ended with strong gains of 194.55 points or 1.90%. The rally remained across the board with FMCG leading the rally. However, PSU Banks grossly under-performed while REALTY and MidCaps remained relatively subdued.

Today’s up move has technical significance in many ways. It has not only sent NIFTY back in to the trading range but has also confirmed and validated the 200-DMA as a sacrosanct support for the immediate short term. Going into trade on Tuesday, the NIFTY shall encounter its 100-DMA which stands at 10454.41. It further has resistance at 10520 levels. Supports exist at 10380 and 10345 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.0203 and it continues to remain neutral showing no divergence to the price. The Daily MACD is still bearish but it is seen sharply narrowing its trajectory. If the pullback sustains and the NIFTY moves on, it is likely to report a positive crossover in coming days. A big white candle on the Candles Chart signifies the credibility of the support area of the 10275-10300 area.

The pattern analysis shows that the NIFTY is back inside the trading zone which is created with the formation of a rectangle after the most recent decline. Though there was a minor breach, but the downside was protected by the 200-DMA after which the NIFTY saw a strong pullback.

Overall, it is still important to note that the relief rally that was seen on Monday still remained more due to short covering. It is extremely essential that for the Markets to move on further, this will need to be replaced with short covering. It is likely that after a short deliberation by NIFTY around the 100-DMA, the rally is likely to continue but might see some intermittent jerks while it deals with its 100-DMA. Continuance of positive outlook is advised for the day.

STOCKS TO WATCH:

Technically resilient setup is observed in stocks like BHARTI AIRTEL, INFRATEL, JINDAL STEEL and POWER, NCC, DHFL, RPOWER, CGPOWER, HINDUSTAN ZINC, VEDANTA, TATA GLOBAL, TECH MAHINDRA and ADANI PORTS.

(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)

Monday, March 12, 2018

MARKET OUTLOOK FOR MONDAY, MAR 12, 2018

MARKET OUTLOOK FOR MONDAY, MAR 12, 2018

In our previous Daily note on Friday, we had mentioned about the importance of the NIFTY moving past the 10275-10300 zones to confirm a temporary base. The Markets remained tentative all though the Friday’s session and the benchmark Index NIFTY50 struggled to move past the 10275-10300 zones and saw retracement once it tested those levels. It ended the day with a modest loss of 15.80 points or 0.15%.

While we enter a fresh week, Monday’s trade is likely to see a stable and strong opening ensured by strong global markets. Having said that, the likely strong opening will see the Markets opening above 10275-10300 zone. However, it would be once again critical to see if the Markets sustains and maintains itself above those levels. In all likelihood, we will see Markets defending those levels.

Monday will see the levels of 10300 and 10365 posing as immediate resistance area for the Markets. Supports come in at 10210 and 10140 area.

The Relative Strength Index – RSI on the Daily Chart is 36.4385 and it stays neutral against the price showing no divergence. It is seen taking a pattern support as well. Daily MACD stays bearish while trading below its signal line. No significant formations were observed on Candles.

Pattern analysis highlights the credibility of the support that is provided by 200-DMA. NIFTY tested this level twice during last week and each time it did so, it has defended it as well. In the immediate short term, we believe this level will stay defended and will not see NIFTY breaching this level in the immediate short term.

Overall, as mentioned, despite a stable and strong opening which is likely on Monday, sustenance above those levels and capitalizing on such possibly strong opening will remain key thing to watch for. Moving past 10275-10300 zones will see the Markets back into the rectangle trading channel that it has formed after the recent corrective decline. If this happens, we see Markets advancing towards its next logical resistance of 100-DMA which stands at 10452. Though cautious, but positive outlook is advised for the day.

Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)

Sunday, March 11, 2018

WEEKLY MARKET OUTLOOK FOR MAR 12 THRU MAR 16, 2018

WEEKLY MARKET OUTLOOK FOR MAR 12 THRU MAR 16, 2018

The Indian Equity Markets extended their corrective move in the sixth week as well as the benchmark Index NIFTY50 ended yet another week on a negative note losing 231.50 points or 2.21% on Weekly basis. The Week remained important from the technical point of view as the NIFTY tested its 200-DMA twice and have managed to defend it so far on the Daily Charts. While on the Weekly Charts, the Markets continue to remain in the 27-month long upward rising channel showing without showing any breach of any kind.

As we go into trade next week, the Markets remain on tenterhooks. The Markets have shown half-hearted signs of finding a base for itself at current levels. However, strong closing of the global markets on Friday is certain to give a positive start to Indian Markets on Monday. However, the crucial thing is that we need to sustain above the 10275-10300 zones after a positive start. It would be crucial to observe if the Markets maintain the likely positive start that it may get on Monday.

On the lower side, a strong support exists at 10140 and 10040 and these levels are not likely to be breached. On the higher side, we may see resistance coming in at 10390 and 10465 zones. The range for this week might remain slighter broader.

The Relative Strength Index – RSI on the Weekly Chart is 47.1613 and it has marked a fresh 14-period low which is bearish. It does not show any divergence against the price. The Weekly MACD stays bearish while trading below its signal line. A falling window emerged on Candles. This is usually a gap and implies continuation of downsides. However, this cannot be read in isolated manner and in the present context may not have a significant negative impact.

The pattern analysis paints a reassuring picture showing no structural breach by the Markets because of the present corrective move. It continues to remain in the 27-month long upward rising channel as evident on the Charts.

Overall, the coming week is a week that we need to watch with our fingers crossed. Strong global markets will provide us a footing for a likely positive start but it would be equally crucial to see if we are able to sustain it and capitalize on it. Given the fact that 200-DMA stays defended on Daily Chart and given the fact that the 27-month long upward rising channel on the Weekly chart continue to remain intact, we believe that likely stronger opening should not be used to create shorts again. We are perhaps, of course subject to confirmation, going in the time again when we start buying the weaknesses rather than selling the strength. Positive caution is advised for the coming week.

A study of Relative Rotation Graphs – RRG this week paint a little challenging picture. IT continues to dominantly remain in the leading Quadrant and it expected to relatively outperform the Markets. Apart from that, we will see sectors like ENERGY, Financial Services, Bank Nifty, attempt to improve their momentum though they may not distinctly outperform the general Markets. Along with these sectors, select stocks from FMCG, METAL and Services sector may attempt to put good performance. However, though not significant, but some improvement in momentum is also expected from broader indices. Apart from this, no eye-catching show is expected from REALTY, SMALL CAPS, PSUBANKS, PSE Stocks, PHARMA, INFRA and AUTO Universe.

(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)

Gemstone Equity Research & Advisory Services

Saturday, March 17, 2018

WEEKLY MARKET OUTLOOK FOR MAR 19 THRU MAR 23, 2018

Friday, March 16, 2018

MARKET OUTLOOK FOR FRIDAY, MAR 16, 2018

Thursday, March 15, 2018

MARKET OUTLOOK FOR THURSDAY, MAR 15, 2018

Wednesday, March 14, 2018

MARKET OUTLOOK FOR WEDNESDAY, MAR 14, 2018

Tuesday, March 13, 2018

MARKET OUTLOOK FOR TUESDAY, MAR 13, 2018

Monday, March 12, 2018

MARKET OUTLOOK FOR MONDAY, MAR 12, 2018

Sunday, March 11, 2018

WEEKLY MARKET OUTLOOK FOR MAR 12 THRU MAR 16, 2018

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