MARKET OUTLOOK FOR MONDAY, MAR 05, 2018

MARKET OUTLOOK FOR MONDAY, MAR 05, 2018

The Markets shall open on Monday after a slumber following long weekend. On Thursday’s trade, saw the last hour cautionary selloff following which the benchmark NIFTY50 ended the day with net loss of 34.50 points or 0.33%. Friday has remained a globally weak day following the Trump administration issuing a diktat to impose 25% duty on Steel and 10% on aluminum which was not received well by the global markets.

Going into trade on Monday, it is very much likely that we may see a negative opening. However, having said that, we also believe that the opening would not be as brutal as it would have if we had opened on Friday. On the Friday’s trade, the Dow recovered nearly 500-odd points from the low point of the day before ending with minor losses. The SGX NIFTY which had lost 180-odd points on Thursday recovered nearly 70-points from the low point of the day.

Monday’s trade is likely to see the zones of 10275-10310 providing key supports even if the weakness is more-than-expected. In routine course, the zones of 10380 and 10350 are likely to act as likely supports. Resistance remains in the 10490 and 10545 zones.

The Relative Strength Index – RSI on the Daily Chart is 43.5116 and it stands neutral showing no divergences to the price. The Daily MACD still remains bearish as it trades below its signal line. No significant formations were observed on Candles.

While having a look at pattern analysis, as of today, the NIFTY is still in the congestion area that it has created for itself following its most recent decline. It is in form of a small symmetry and the NIFTY has currently taken support at its 100-DMA at Close levels.

All and all, though weaker opening on Monday cannot be ruled out; the quantum of weakness that we will see will largely define the trend for coming days. We expect not-so-brutal weakness and reaction in the Markets on Monday. Also, we expect that the Markets will not breach the congestion area that it is currently trading in. Looking at the amount of shorts that exists in the system, we expected them to provide cushion to the Markets at lower levels. We recommend participants taking a highly cautious view on the Markets. However, large shorts should be avoided and overall exposures should be kept moderate.

STOCKS TO WATCH:

Resilient technical set up is observed on stocks like JAYPEE INFRATECH, SINTEX, ORIENTAL BANK, INFOSYS, INOX WIND, MINDTREE, IVRCL, VEDANTA, ASHOK LEYLAND and IIFL Holdings.

(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 
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