Tuesday, August 8, 2017

MARKET OUTLOOK FOR TUESDAY, AUG 08, 2017

MARKET OUTLOOK FOR TUESDAY, AUG 08, 2017
The Indian Equity Markets made no meaningful headway as it oscillated in a very narrow range before ending the day with minor loss of 9 points or 0.09%. On Tuesday, we can expect a quiet start to the Markets. We expect modest corrective undertone to persist and we are once again seeing shorts entering the system. In any given case, the zones of 10114-10150 have now become even more critical to watch out for as they are likely to remain immediate resistance zone for the Markets. Unless this area is breached significantly, it is unlikely that we will see any significant and meaningful up move.
The levels of 10114 and 10150 will act as immediate resistance levels for the Markets. Supports come in at 9990 and 9945 levels.
The Relative Strength Index – RSI on the Daily Chart is 65.8673 and it remains neutral showing no divergences of any kind against the price. The Daily MACD has turned bearish as it has reported a negative crossover and it now trades below its signal line. No significant formations were observed on Candles.
The pattern analysis shows that the Markets are heading nowhere after marking its immediate highs in the 10114-10150 zones. It trades well above the rising trend line pattern support and in event of any corrective move; this pattern is likely to act as support.
All and all, we do not see the Markets making any significant move and are expected to remain range bound. We expect corrective undertone to persist but with limited declines. We recommend using all up moves to protect and book profits. Shorts should be avoided and downsides should be used to make modest purchases. Continuance of cautious outlook is advised for today.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
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Monday, August 7, 2017

WEEKLY MARKET OUTLOOK FOR AUG 07 THRU AUG 11, 2017

WEEKLY MARKET OUTLOOK FOR AUG 07 THRU AUG 11, 2017
Much as was expected in our previous Weekly note, there much significant amount of volatility that the Markets witnessed in the week that has gone by. Still, the benchmark NIFTY continued to post modest gains and has ended the Week with net gains of 51.90 points or 0.52% on a Weekly basis. We still maintain and reiterate that the levels of 10114-10150 seem to be very critical levels for the NIFTY. Unless these levels are breached on the upside significantly, sustainable up moves will not be seen.

The coming week will see the levels of 10150 and 10230 acting as immediate support levels. Supports will come in at 9960 and 9850 levels.

The Relative Strength Index – RSI on the Weekly Chart stand at 79.7787 and it has marked a fresh 14-period high. However, we cannot ignore the fact that this indicator now remains in seriously overbought territory. Weekly MACD stays bullish while trading above its signal line. No significant formations were observed on Candles.

There is no dispute to the fact that the Markets are extremely buoyant and are readying itself for a fresh set of up move. However, we just cannot ignore the fact that the extremely overbought nature of the Markets will prevent it from a significant breakout from 10114-10150 levels. Any attempt will definitely be met with volatile profit taking bouts. Volatility will remain very much ingrained in the system. Except for some sector specific stock picks, broad chase of momentum will have very skewed  and unfavorable risk to reward ratio for the market participants.


A study of Relative Rotation Graphs – RRG show that corrective mood is spreading wider into the broader markets. The coming week will only see just 3 sectors relatively out-performing the Markets. PHARMA has considerably improved its performance and is likely to continue to do so. METAL and IT Stocks will also join this relative out-performance. We will see these sectors doing good even with strength in the US Dollar that is currently seen. 

The broader Markets will continue to lose momentum. REALTY, FMCG, AUTO etc, are likely to slow down and gradually lose momentum. We will see ENERGY sector showing some performance in select stocks.

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

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member: 
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA

+91-98250-16331 



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