Gemstone Equity Research & Advisory Services

Thursday, November 23, 2017

MARKET OUTLOOK FOR THURSDAY, NOV 23, 2017

MARKET OUTLOOK FOR THURSDAY, NOV 23, 2017

We had referred to the importance of the resistance area of 10345-10365 zones in our yesterday’s note and had underlined the necessity of the Markets to move past it for a continued up move. The Wednesday’s session played out exactly on the analyzed lines as the Markets opened positive but came off after testing 10368. The benchmark NIFTY50 ended the day gaining 15.40 points or 0.15%. Going into trade on Thursday, the analysis remain on similar lines as the levels of 01345-10365 will continue to pose resistance to the Markets. A quiet opening is expected but it would be of paramount importance for the Markets to move past these levels for a meaningful up move.

The levels of 10365 and 10390 will once again continue to act as immediate resistance to the Markets. Supports come in 10250 and 10200 marks.

The Relative Strength Index – RSI on the Daily Chart is 57.7557 and it continues to remain neutral showing no divergences against the price. Daily MACD is bearish as it trades below its signal line but it is seen sharply narrowing its trajectory. The Spinning Top on the Candles continued to portray indecisiveness on the part of the markets participants.

The pattern analysis very explicitly shows the tentative mood of the Markets. After taking support near the 100-DMA, the NIFTY presently has managed to precariously hang on to the short term 20-DMA.

All and all, as we often mention, that without disputing the broad uptrend, the levels of 10345-10365 zones are very important levels to watch. The tentative and indecisive mood of the Markets is very much evident and it would be once again fair to conclude that until these levels are breached on the up side, not meaningful gains would be seen. Given the tentative mood of the Markets and reading along with the F&O data for the immediate short term, we continue to recommend vigilantly protecting profits at higher levels adopting a cautious view on the Markets.

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

Wednesday, November 22, 2017

MARKET OUTLOOK FOR WEDNESDAY, NOV 22, 2017

MARKET OUTLOOK FOR WEDNESDAY, NOV 22, 2017

In our previous note, we had expressed strong concerns about Markets resisting to the 10345-10365 zones. In line with this analysis, the NIFTY50 Index saw retracement after testing highs at 10358.70. Going into to trade on Wednesday, we expect a quiet start to the Markets. The zones of 10345-10365 will continue to pose stiff resistance to the Markets in general. We will see sustainable rally in the immediate short term only if these levels are meaningfully surpassed despite the fact that the long term setup remains buoyant and the primary trend remains perfectly in place.

Wednesday’s session will see the levels of 10365 and 10390 continuing to act as resistance levels for the Markets. Supports come in at 10275 and 10180 zones.

The Relative Strength Index – RSI on the Daily Chart is 56.4124 and this remains neutral showing no failure swings or divergences against the price. Daily MACD stays bearish while it trades below its signal line. Mixed signals emerged on Candles. A rising window emerged which essentially is a gap and implies continuation of the up move. But at the same time it also had a long upper shadow. When such formations arise, it can damage the impact of a rising window and nullifies the expected bullish implications arising out of it.

Pattern analysis confirms that the NIFTY has managed to cling to its short term 20-DMA which is 10318. It will have to stay above this to avoid any short term weakness in the immediate near term.

All and all, NIFTY50 came off from the highs of the day and resisted fiercely to the 10345-10365 zones. While doing so, it has shed Open Interest. We can fairly conclude that the Markets saw some long unwinding at lower levels. From the technical structure of the Charts and reading F&O data along with it, we fairly feel that we will see consolidation continuing in the Markets in the immediate near term despite the primary trend remaining intact. For any meaningful up move the levels of 10365 will need to be surpassed. Until this happens, we continue to recommend remaining highly stock specific and continue to protect profits at each higher level.