Gemstone Equity Research & Advisory Services

Tuesday, September 5, 2017

MARKET OUTLOOK FOR TUESDAY, SEP 05, 2017

MARKET OUTLOOK FOR TUESDAY, SEP 05, 2017

Amid fresh geopolitical tensions, the benchmark NIFTY50 had a negative day on Monday as it ended the day losing 61.55 points or 0.62%. Despite the developments and the news flow that the Global Markets digested, it is important to note that even with the Monday’s decline, there is no structural damage to the Charts. On Tuesday, we expect a quiet start to the Markets and in absence of any negative news flow, the favorable technical conditions is likely to take over and we can expect the Markets to trade with positive bias.

The levels of 9975 and 10030 will play out as likely resistance levels on Tuesday. Supports come in at 9860 and 9835 levels.

The Relative Strength Index – RSI on the Daily Chart is 52.3607 and it remains neutral showing no divergence against the price. The Daily MACD continues to remain bullish as it trades above its signal line. Though an engulfing bearish line has occurred on Candles, given its place for formation, it holds little or no significance in the present scenario.

If we have a look at pattern analysis, we see that the NIFTY still continues to trade comfortably in the upward rising channel that it has been trading over last couple of months. There is no structural triggers that point towards any major movements on either side.

If we have a broader view, the NIFTY not only trades above its 50, 100 and 200DMA, it also trade above its short term 20-DMA. This reading is enough to conclude that there are no triggers at present that triggers any major downsides. The levels of 50-DMA along with its filter continues to remain a major support to bank upon in the even the Markets consolidate. We expect the Markets to trade extremely stock specific and the select out-performance can be expected from broader indices. While strictly avoiding shorts, cautious optimism is advised for Tuesday.

Milan Vaishnav, CMT

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

Associate International Member:

Society of Technical Analysts (STA), UK

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91- 70164-32277 / +91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Monday, September 4, 2017

MARKET OUTLOOK FOR MONDAY, SEP 04, 2017

MARKET OUTLOOK FOR MONDAY, SEP 04, 2017

The Markets ended the session on Friday on a positive note as the benchmark NIFTY50 gained 56.50 points or 0.57%. The positive closing on Friday had some technical significance as well. In the previous days, not only the NIFTY has affirmed and re-affirmed the 50-DMA as its immediate major support, it has also moved past its short term 20-DMA on Friday. We expect a positive start to Monday and despite some possible consolidation at higher levels, we expect the Markets to maintain a overall positive bias.

The levels of 10040 and 10085 will act as immediate resistance levels for the Markets. Supports come in at 9950 and 9910 zones.

The Relative Strength Index – RSI on the Daily Chart is 56.7249 and it has marked a fresh 14-period high which is bullish. It does not show any bullish or bearish divergence. The Daily MACD reported a positive crossover and it is now bullish as it trades above its signal line. Candles do not show any significant formations on the Charts.

The pattern analysis reveals an encouraging picture. As it is evident on the Charts, the NIFTY remains comfortably placed in the rising channel that it has been trading in. Also, it has reaffirmed the levels of 50-DMA as its sacrosanct support, it has also moved past the short term 20-DMA.

Friday’s session has also seen NIFTY September futures adding 10.42 lakh shares or 6.57% in Open Interest. This indicates fresh longs in NIFTY. The closing of the NIFTY above 20-DMA indicates likely return of short term momentum in the Markets. Though consolidation at higher levels not ruled out, we expect the Markets to maintain positive bias. Any consolidation or minor dips should be continued to make fresh purchases.