Gemstone Equity Research & Advisory Services

Wednesday, June 21, 2017

MARKET OUTLOOK FOR WEDNESDAY, JUNE 21, 2017

MARKET OUTLOOK FOR WEDNESDAY, JUNE 21, 2017

In our previous technical note, we had expected that no follow-up buying would emerge despite a relatively buoyant session on Monday. Very much in line with this analysis, the benchmark NIFTY50 headed nowhere and ended very flat on Tuesday losing 4.05 points or 0.04%. For Wednesday, we expect such tentative mood in the Markets to occur. We still do not expect any runaway rise to resume in the Markets. We expect the zones of 9700-9725 to continue to act as formidable resistance to the Markets.

The levels of 9675 and 9710 will play out as resistance levels for the Markets on Wednesday. The supports will come in at 9610 and 9550 levels.

The Relative Strength Index – RSI on the Daily Chart is 62.0304 and it remains neutral showing no divergences against the price. The Daily MACD is still bearish while it trades below its signal line. No significant formations were observed on Candles.

The pattern analysis suggests the NIFTY drifting below the rising trend line drawn from 9200 levels. In any case, so long as it maintains the levels above 9625, it will avert any downsides. However, given the rising nature of this support line, longer the Markets consolidate, longer it will take to move past its previous highs.

Overall, we still continue to reiterate our cautious view on the Markets. Lack of follow-up buying after relatively better session on Monday is enough warning that weariness still persist in the Markets. More so, the NIFTY still remains overbought on the Weekly Charts. This is enough reason for the Markets to continue to consolidate for some more time. Profits in any further up moves will have to be guarded cautiously.

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)

Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA

www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Tuesday, June 20, 2017

MARKET OUTLOOK FOR TUESDAY, JUNE 20, 2017

MARKET OUTLOOK FOR TUESDAY, JUNE 20, 2017

In a much better than expected session on Monday, the benchmark NIFTY50 pullback after couple of days of consolidation. Though it came off a bit from the high point of the day, it still managed to end the day with decent gains of 69.50 points or 0.72%. There is no doubt that the Markets have as of now averted any possibility of a further decline as it climbed above the 9600-9625 levels. On Tuesday, we expect a modestly positive start, and in all likelihood the Markets may extend their gains and attempt go near 9700-mark. However, we still do not expect any runaway rise beyond these levels immediately.

The levels of 9675 and 9710 will act as immediate resistance levels for the day. While supports will come in lower at 9610 and 9550 zones.

The Relative Strength Index – RSI on the Daily Chart is 62.6094 and it stays neutral showing no bullish or bearish divergence against the price. The MACD continue to trade below its signal line and is bearish. On Candle, a while body has occurred. This very much resembles to a not-so-classic rising star. This is bullish but it needs confirmation on the other day.

Overall, the F&O figures do not suggest any significant change in sentiment. However, Monday’s pullback is due to short covering and it would be important to see if this gets replaced with fresh buying.

All and all, it would be no surprise if we once again see the NIFTY inching upwards. However, it is very important to observe that we cannot ignore the overbought nature of the Markets on the Weekly Chart. So, it would be healthy for the Markets if it still spends some more time consolidating before it breaks its previous high and moves up. We do not expect any runaway rise in the Markets and if the Markets test the levels of 9700-9710 again, it would be important to guard once gain from the profit taking bouts.