Gemstone Equity Research & Advisory Services

Monday, July 10, 2017

MARKET OUTLOOK FOR MONDAY, JULY 10, 2017

MARKET OUTLOOK FOR MONDAY, JULY 10, 2017

The Markets had a quiet session on Friday much on the expected lines. The NIFTY oscillated in a 40-odd point range with not much volatility and ended the day with a net loss of 8.75 points or 0.09%. We do not see the Markets making much headway and the levels of 9700-9725 will remain important levels to watch out for. No major up move is expected unless the NIFTY breaches these levels in a convincing manner. We expect positive consolidation to continue in the Markets.

Monday will see the levels of 9690 and 9725 acting as immediate resistance levels for the Markets. Supports come in at 9610 and 9575 zones.

The Relative Strength Index – RSI on the Daily Chart is 60.9671 and it remains neutral showing no divergences against the price. The Daily MACD has reported a positive crossover and it is now bullish trading above its signal line. Occurrence of a Spinning Top indicates indecisiveness and also signals loss of momentum at higher levels.

The pattern analysis show that the NIFTY has resisted precisely to the rising trend line which it broke on the downside while it corrected previous month. Further to this, the rising nature of the trend line makes it even more difficult for the Markets for a clear breakout.

Overall, the structure of the Chart suggests that consolidation is expected to continue. However, this is likely to turn out to be a positive consolidation and downsides are likely to remain limited. We will see clear sector specific rotations leading to stock specific out-performance. Though we continue to maintain positive bias we continue to recommend protection of profits at higher levels even with the underlying trend remaining intact.

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

Sunday, July 9, 2017

WEEKLY MARKET OUTLOOK FOR JULY 10 THRU JULY 14, 2017

WEEKLY MARKET OUTLOOK FOR JULY 10 THRU JULY 14, 2017

In a Week that remained better-than-expected for the Markets, the benchmark NIFTY50 ended with net gains of 144.90 points or 1.52% on week-on-week basis. Though the Markets remain overbought on Weekly Charts, we see the Markets remaining in a broad range. Though a fresh breakout is not expected this week as it would be too soon and too fast, we certainly expect the Markets to trade with a positive bias.

Next Week will see the Markets resisting at 9710 and 9780 zones. Supports will come in at 9500 and 9430 levels.

The Relative Strength Index – RSI on the Weekly Chart is 71.7787. Though it shows no divergence against the price, it stays in overbought territory. The Daily MACD stays bullish while trading above its signal line. However, it is sharply moving towards reporting a negative crossover.

The pattern analysis on the Weekly Chart the Markets consolidating in a narrow range after the up move that it saw from 8950-9000 mark as it achieved a breakout from there. We expect this consolidation to continue and some area pattern to develop before Markets move up again.

Overall, we should not fail to understand that long the period of consolidation, healthier it will be for the Markets. Such consolidation would give Markets more impetus to head higher over coming week. So for as the coming week is concerned, we strongly recommend that unless the Markets breach the previous high of 9700-9710 mark, it should be approached with caution and profits should be protected at higher levels.

A study of Relative Rotation Graphs – RRG very clearly show that REALTY which led the relative outperformance over past 10 weeks is now ready to take the back seat. REALTY will be seen losing momentum over coming Week. FMCG will continue its stellar show in the coming Week. PHARMA, IT and Metal Stocks will considerably improve their ground and will ready itself for serious up ticks over coming week. We will see broader indices like NIFTY Next 50, MID50, NIFTY 100,etc losing momentum in the coming 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, is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)