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 
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