Gemstone Equity Research & Advisory Services

Monday, September 18, 2017

MARKET OUTLOOK FOR MONDAY, SEP 18, 2017

MARKET OUTLOOK FOR MONDAY, SEP 18, 2017

On Friday, the Indian Equity Markets continued to consolidate and ended virtually unchanged with the NIFTY ending the day with negligible loss of 1.20 points or 0.01%. In the previous Week, we have seen the Markets consolidating fiercely and remaining in extremely capped range. On Monday, we expect a quiet start and also expect the previous two days of consolidation to get spilled into the coming week as well. Monday is likely to see a range bound session once again with the zones of 10135-10150 continuing to offer serious resistance to the Markets.

Monday will see the levels of 10135 and 10190 playing out as serious resistance levels for the Markets. Supports come in at 10020 and 9960 levels.

The Relative Strength Index – RSI on the Daily Chart is 62.1810 and remains neutral showing no divergences against the price. The Daily MACD stays bullish but it has flattened its trajectory. No significant formations were observed on Candles.

The pattern analysis shows that the NIFTY continues to trade in the upward rising channel that it has formed over past couple of months. It is continuing to track the upper Bollinger band and hovers within very short distance of its lifetime highs.

Overall, with the Markets trading above all of its moving averages, there is no reason to fear or expect any serious downsides from these levels as of now. However, we cannot ignore some evident fatigue on the lead indicators coupled with relatively high NIFTY PCRR (Put to Call Ratio). These factors are either likely to keep the Markets under check or prevent any immediate meaningful upsides from current levels. We expect volatile range bound consolidation to continue and recommend cautiously positive outlook on the Markets for the day.

Milan Vaishnav, CMT, MSTA

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

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 17, 2017

WEEKLY MARKET OUTLOOK FOR SEP 18 THRU SEP 22, 2017

WEEKLY MARKET OUTLOOK FOR SEP 18 THRU SEP 22, 2017

The Indian Equities ended the Week on a positive note as the benchmark NIFTY50 Index gained 150.60 points on Weekly basis. Having said this, though the NIFTY ended the week gaining 1.52%, the last two days of the Week that has gone by were spent by the Markets consolidating in a very narrow range. Though the set up looks positive, we expect that the consolidation that we saw on the last two days of the week is likely to get spilled over into coming week as well. The levels of 10130-10150 will act as stiff resistance to the Markets initially in the coming week. Beyond this, the Markets may test new highs.

The levels of 10150 and 10265 will act as immediate resistance over coming week. Supports come in lower at 10010 and 9930 zones.

The Relative Strength Index – RSI on the Weekly Chart is 69.1107. The NIFTY has marked a fresh 14-period high but RSI has not and therefore this has resulted into Bearish Divergence. The Daily MACD continues to remain bearish while trading below its signal line. No significant formations were observed on Candles.

The pattern analysis show that the NIFTY is currently trading in a narrow band but stays well within the 18-month long upward rising channel that it has formed. It is tracking the upper Bollinger band and stays in the upper range of the channel.

Overall, we cannot rule out the possibility of the NIFTY testing fresh highs in the coming week. However, in the same breath, we do not see NIFTY making significant advancements on the upper side also. The clear evidences of fatigue on the lead indicators, much higher NIFTY PCR (Put to Call Ratio), and VIX remaining at its lowest in recent times is likely to put a check and prevent any runaway rise in the Markets. The Week is likely to remain highly stock specific and therefore we recommend remaining highly selective in picking stocks. While vigilantly protecting profits at higher levels, cautious outlook is advised for the coming week.

A study of Relative Rotation Graphs – RRG show that in the coming week, we will see stocks from broader indices like NIFTY JR (Nifty Next 50), CNXMIDCAP100, will see sharp relative outperformance against NIFTY. The Energy and Metal Stocks also likely to continue to relatively outperform the Markets. On the other hand, we will see substantial improvement of performance from PSU Banks and select Private Banks along with IT. No major outperformance is expected from Auto. REALTY, along with FMCG and Pharma will continue to lag and remain weak on a weekly basis.

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, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia

Milan Vaishnav, CMT, MSTA

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member:

CMT Association (Formerly Market Technicians Association, (MTA), USA