WEEKLY MARKET OUTLOOK FOR JULY 03
THRU JULY 07, 2017
In our previous Weekly Note, we had
expected the Markets to remain largely uneventful and in a defined range. The
Markets ended the Week with a modest lost with the benchmark NIFTY50 ended with
net loss of 54.05 points or 0.56% on Week-on-Week basis. Going ahead, given the
overall technical structure of the Charts, we expect that the Markets will
continue to remain in a broad trading range. Though it may not post major
downsides but at the same time any runaway rise too is equally unlikely.
Coming week will see the levels of 9590 and
9685 acting as resistance area. The supports will come in at 9410 and 9375
zones.
The Relative Strength Index – RSI on the
Weekly Chart is 67.8084. It has just moved below the overbought area and this
is a bearish sign. The Weekly MACD is bullish while it trades above its signal
line but it is explicitly moving towards reporting a positive crossover.
The pattern analysis just show Markets
taking a breather after breaking out from 8900-8950 zones and marking the
recent top at 9710 levels. It is likely that it continues to rest for a while
by the time it gathers strength to move up again.
All and all, we expect the Markets to
continue to trade with a cautious undertone. Some intermittent profit taking
bouts are likely to occasionally occur and the levels of 50-DMA on Daily Charts
will be important to watch out for. We reiterate to continue to have modest
exposures while preserving more cash while maintaining cautious outlook on the
Markets.
A study of Relative Rotation Graphs – RRG
shows that just like previous week, all major broad sectors such as CNX100,
200, 500, NIFTYJR, PSUBANKS, ENERGY, INFRA, MEDIA, CNXMID, etc are distinctly
weakening . We are also likely to see loss of momentum from BankNifty, REALTY
and Financial Services Stock this week though they are expected to continue to
relatively out-perform the NIFTY. We will see FMCG, Services and select AUTO
Stocks out-perform. IT, METAL and Pharma are likely to post stock specific
out-performance.
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, is Consultant Technical Analyst at Gemstone Equity Research
& Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
Milan Vaishnav, CMT
Technical Analyst
(Research
Analyst, SEBI Reg. No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
+91-98250-16331
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