Sunday, November 26, 2017

WEEKLY MARKET OUTLOOK FOR NOV 27 THRU DEC 01, 2017

WEEKLY MARKET OUTLOOK FOR NOV 27 THRU DEC 01, 2017
In our previous Weekly note, we had mentioned about the levels of 10345-10365 acting as important resistance area for the Markets. In the Week that went by, the NIFTY50 index continued to resist to these levels for 4 days out of 5 and in the end, attempted to marginally move past it. The benchmark NIFTY50 ended the week with net gains of 106.10 points or 1.03%. In the coming Week, we have expiry coming up for the current derivative series. We will see NIFTY50 oscillating in a broad range. We might see it inching higher and make attempts to test its previous highs but a clear-cut fresh breakout may still continue to elude us. Despite every marginal higher level that the NIFTY may try and attempt, it will continue to remain vulnerable to profit taking bouts at higher levels.

The levels of 10465 and 10535 will play out as upper resistance area for the coming week. The lower supports that we can expect exist at 10250 and 10130 levels.

The Relative Strength Index – RSI on the Weekly Chart is 66.2680 and it stays neutral for this week without showing any divergences against the price. The Weekly MACD stays bullish as it trades above its signal line. No significant formations were observed on Candles.

The Pattern Analysis makes it evident that the NIFTY still continues to trade in a 22-month long trading Channel that it has created. It resisted to this 22-month old upper trend line at 10490. However, this resistance has now shifted higher and this has made some room for the Markets to attempt small marginal highs. If we go by Classical Pattern Analysis once again, any higher movement that the Markets may try and attempt will have no strength if the lead indicators continue to throw up Bearish Divergences. Overall, we expect the Markets to oscillate in a broad range over coming week. Though primary trend may not be violated but in the same breath, we also do not expect the Markets to race beyond its recent highs. The Week may remain largely stock-specific.


A study of Relative Rotation Graphs – RRG show that the METAL pack may see some individual performance but has overall continued to lose momentum and may increase its under-performance against the benchmark, i.e. NIFTY. We will see INFRA, MEDIA, and IT continue to grossly improve their relative out-performance. Some stock specific out-performances may also be seen from REALTY and MIDCAP universe. FMCG may slightly lag while AUTO Pack may consolidate its performance.  No major relative out-performance may be expected from SERVICES, FINANCIAL SERVICES or Bank NIFTY going ahead in this week.

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 Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts, STA (UK)


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