Gemstone Equity Research & Advisory Services

Monday, September 11, 2017

MARKET OUTLOOK FOR MONDAY, SEP 11, 2017

MARKET OUTLOOK FOR MONDAY, SEP 11, 2017

The Markets had a relative quiet session on Friday as after opening on a higher note, it remained in a range and ended the day with modest gain of 4.90 points or 0.05%. The benchmark NIFTY50 has continued to remain under stiff congestion area and it continues to consolidate. On Monday, we expect a modestly positive start to the Markets. It is important to note that the NIFTY has added lot of short positions in last couple of days. Further, given the fact that the NIFTY has been trading in a congestion area for quite a long time, it is due that it makes a decisive move on either side in coming days.

The levels of 9930 and 10060 will act as immediate resistance levels while supports will come in at 9905 and 9850 zones.

The Relative Strength Index – RSI on the Daily Chart is 53.4201 and it remains neutral showing no divergences against the price. Daily MACD still continues to remain bullish as it trades above the signal line. No significant formations were observed on Candles.

The pattern analysis show the NIFTY trading well within the rising channel that it has formed over last couple of months. However, a stiff congestion area has been formed and there are indications that NIFTY is likely to make a decisive sharp move over coming days.

As of today, the Index continues to trade above all of its moving averages. Further, there is evidence of fresh shorts in the system as the premium in the September series contracted noticeably. With the Index currently above all of its moving averages and no evidence of any structural weakness on the Charts, there are bright chances that the Markets continue to maintain positive bias in coming days. We continue to recommend making select purchases with even corrective move that the Markets make.

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

Sunday, September 10, 2017

WEEKLY MARKET OUTLOOK FOR SEP 11 THRU SEP 15, 2017

WEEKLY MARKET OUTLOOK FOR SEP 11 THRU SEP 15, 2017

Our previous Weekly Outlook mentioned all possibilities of the NIFTY not racing towards its highs too soon and not showing any major downsides as well. Very much in line with this analysis, the benchmark NIFTY50 spent the entire Week that has gone by trading in a very narrow and defined range and not making any meaningful headway. It ended the Week with net loss of 39.60 points or 0.40% on a Weekly basis. We expect a subdued start to the Week on Monday. We expect the coming week to remain range bound we will see NIFTY struggling to scale fresh highs. Despite few sectors which are likely to distinctly out-perform, slightest of the negative trigger will see the NIFTY testing its previous supports.

The coming Week will continue to see the levels of 9990 and 10110 acting as immediate resistance levels, supports are expected to come in at 9830 and 9750 levels.

The Relative Strength Index – RSI on the Weekly Chart is 65.4614 and it remains neutral showing no failure swings or any divergences against the price. The Weekly MACD continues to remain bearish while trading below its signal line and no divergences have been observed within the last five periods. No significant formations are seen on Candles.

The pattern analysis show the Markets trading in the upper range of the long 18-month channel that it has formed. Given the overall structure of the Weekly Charts and the pattern, the NIFTY is currently seen in a minor congestion area and showing some minor signs of exhaustion.

Overall, the coming week is also likely to see some volatility remaining ingrained in it. The NIFTY, if seen on the Daily Charts, is currently in the longest congestion period given the number of days it has been trading in a narrow range. The levels of 9860-9820 remain very critical zone for the Markets and any breach below this is likely to cause short term disruption in the primary trend. However, as of now, the primary trend remains intact. However, we would strongly recommend remaining extremely stock specific as the coming Week is expected to remain dominated with select stock specific performances.

A study of Relative Rotation Graphs – RRG show that the coming week will see distinct out-performance from METAL pack continuing. It is likely that the select stocks from NIFTY Junior (NIFTY Next 50), MIDCAP and ENERGY pocket join the party in relative stock specific out performance. No major improvement is likely from PHARMA, FMCG and BANKNIFTY which is likely to remain range bound. PSUBANKS and MEDIA will continue to show improvement in momentum in coming week. REALTY, IT, etc will continue to show relative under-performance.

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