Gemstone Equity Research & Advisory Services

Monday, October 9, 2017

MARKET OUTLOOK FOR MONDAY, OCT 09, 2017

MARKET OUTLOOK FOR MONDAY, OCT 09, 2017

Indian Equity Markets continued to display its buoyant undertone as the Friday’s session saw a better-than-expected show while the benchmark NIFTY50 ended on a strong note gaining 91 points or 0.92%. In view of the Friday’s session, the Index has crawled back once again above the 50-DMA mark and has attempted to throw itself back into the upward rising channel that it has been trading in over past couple of month. While a quiet start to the Markets is expected on Monday, the key would be to see if it continues to successfully survive above 50-DMA levels. The VIX has once again dropped to the lowest values in recent times.

Monday is expected to see the levels of 10030 and 10075 playing out as resistance area for the Markets. Supports come in at 9945 and 9910 zones.

The Relative Strength Index – RSI on the Daily Chart is 53.6557 and it remains neutral showing no divergence against the price. The Daily MACD still remains bearish while it trades below its signal line.

The pattern analysis depict a positive development that the Index has once again crawled back above its 50-DMA has averted a immediate loss of momentum. Further, it has also attempted to trade inside the upward rising channel that it has breached on the downside couple of days back.

Overall, if we take a broader view of the Markets, though the immediate creeping in of weakness seems to have been averted, it would be important for the Markets to sustain above the 50-DMA. This will keep the short term momentum intact. Markets are little overbought on Stochastic and the returning of the VIX to its lowest levels in recent times once again indicate that we might see volatility creeping into the Markets once again. We reiterate avoiding shorts and continue making select purchases and use all up moves to protect profits.

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, October 8, 2017

WEEKLY MARKET OUTLOOK FOR OCT 09 THRU OCT 13, 2017

WEEKLY MARKET OUTLOOK FOR OCT 09 THRU OCT 13, 2017

The week that went by certainly saw volatility remaining ingrained in the Markets much on expected lines but overall it remained much better than expected. In the short week, the benchmark ended the Week with net gains of 191.10 points or 1.95% on weekly basis. The Weekly Charts have validated the broad trading pattern that has appeared on the Daily Charts. Just like Daily Charts, a rectangular pattern is emerging on the Weekly Charts as well. This gives credibility to both the patters as the patterns are fractal in nature. In the coming week, we will see the Markets remaining volatile and range bound but trading with upward bias. Though no major downsides are likely, the top of 10179 too is not likely to be taken out too soon too fast.

Next Week will see the levels of 10050 and 10175 playing out as resistance area. Supports will remain at 9910 and 9830 zones.

The Relative Strength Index – RSI on the Weekly Chart is 61.2419 and it remains neutral showing no divergence against the price. The Weekly MACD is bearish as it trades below its signal line. No major formations were observed on Candles.

The pattern analysis indicates that the NIFTY continues to remain comfortably in the 18-month old upward rising channel. However, it also appears that the NIFTY is likely to form a rectangular trading range just like it did on the Daily Charts.

All and all, given the lead indicators and overall sectoral study, we are unlikely to see any major downsides in the Markets in the coming week. However, in the same breath, runaway rise beyond the previous highs of the Markets is unlikely as well. We expected to see range bound movement with some volatility ingrained in the Markets in the coming week. With signs of any reversal as yet, shorts should be avoided and dips should be utilized to making fresh select purchases.

A study of Relative Rotation Graphs – RRG show that in the coming week, METAL stocks will continue to relatively outperform. Along with this, we will also see good performance coming in from IT and PHARMA stocks. MEDIA too has shown improvement and we will see select gains in this sector as well. We are likely to see select and highly stock specific outperformance in broader Indices like CNX100 and CNX200. No major show is expected from FMCG, REALTY and PSUBANKS. NIFTY Junior (Nifty Next 50) is likely to lose momentum this 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, 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