MARKET OUTLOOK FOR TUESDAY,JUNE 26, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 26, 2018

The Indian Equity Markets returned bulk of its previous day’s gains on Monday as it ended the first day of the Week on a negative note losing 59.40 points or 0.55%. The Markets traded stable for the major part of the session but it was the last hour of the trade that saw the weakness creeping in. The NIFTY’s struggle with the falling trend line pattern resistance continues and with NIFTY not able to move past the critical 10820-10850 zones, it is getting vulnerable to pressures as it moves into the apex of the broad symmetrical triangle that it has been trading in.

Stepping into Tuesday’s trade, we see possibilities of weakness persisting due to the weaker global picture. In any case, the zones of 10820-10850 continue to pose critical resistance to the Markets.

Tuesday will see the levels of 10820 and 10850 offering resistance while supports are expected to come in at 10740 and then at 10680 in form of 50-DMA.

The Relative Strength Index – RSI on the Daily Chart is 52.8408. It continues to remain neutral showing no divergence against the price. Daily MACD stays bearish while trading below the signal line. The emergence of a strong black  body on Candles has once again lent credibility to the pattern resistance.

Pattern analysis shows NIFTY continuing to fiercely resist to the falling trend line which joins the high of 11170 to the subsequent lower tops. While it continues to remain in a broad symmetrical triangle pattern, it is moving near its apex and is becoming prone to a sharp move in coming days.

Overall, it is time that we once again tread the Markets with some caution. Though it currently rests very near to its short term 20-DMA, any weakness will make sure that the NIFTY tests its 50-DMA. Also, with each day with no directional move happening, NIFTY is also making itself vulnerable to a sharp move that will lead to resolution to the current pattern. We recommend staying away from taking any major directional call and avoid heavy purchases. Shorts too should be avoided until Markets makes any meaningful directional move. While remaining light on positions, preservation of cash with cautious view on the Markets is advised for the day.

STOCKS TO WATCH:

Relatively resilient technical set up is observed in PNB HOUSING, SUN TV, NBCC, TECH MAHINDRA, FIRST SOURCE, INFOSYS, UPL, TVS MOTORS, BEML,OIL INDIA, HAVELLS and INDIGO.

(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
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