Gemstone Equity Research & Advisory Services

Thursday, December 14, 2017

MARKET OUTLOOK FOR THURSDAY, DEC 14, 2017

MARKET OUTLOOK FOR THURSDAY, DEC 14, 2017

The NIFTY50 continued with its losing streak on Wednesday as the benchmark Index closed further losing 47.20 points or 0.46%. What seemed to be a classical recovery in the first half of the session, turned highly disappointing as the Index lost over 125 points from the high point of the day. Volatility ruled the roost as the Markets modestly breached the 50-DMA support at Close but stayed within its filters. Caution weighed heavy ahead of Gujarat poll survey and Fed Interest rate decision wherein a rise of 25 bps is discounted for.

Going into trade on Thursday, we might see the Markets attempting to stabilize an attempt to find some base again. The Markets have ended just a notch below its 50-DMA but has remained within its filter and has held the support zone of 10180-10200. We expect a modestly positive opening tomorrow and the levels of 10180 and 10110 will hold out as extremely important supports.

The Relative Strength Index – RSI on the Daily Chart is 46.9237 and it stays neutral showing no divergence against the price. The Daily MACD continues to remain bearish while trading below its signal line. No significant formations were seen on Candles.

Pattern analysis shows that the Markets continue to drift downwards and remain in the falling channel. This falling channel is the intermediate trend created after the Markets marked the lower top of 10410.

All and all, the NIFTY on Thursday will face little tricky situation. It would be of paramount importance for the Markets not to significantly breach the 10180-10200 support zones. If this happens, we will see some more weakness persisting in the near term. However, there is a silver lining in form of much lower-than-average volumes in the previous two declines that the Markets saw. Also, the shorts that exist in the system can lend support in case of extended weakness. Overall, we recommend staying away from taking any major exposure in the Markets and adopt wait-and-watch approach with a cautious view 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

Wednesday, December 13, 2017

MARKET OUTLOOK FOR WEDNESDAY, DEC 13, 2017

MARKET OUTLOOK FOR WEDNESDAY, DEC 13, 2017

After three days of a pullback, the Indian Equity Markets snapped its rally and saw some corrective pressure coming in. The benchmark Index NIFTY50 ended the day losing 82.10 points or 0.80%. The Markets had seen a technical pullback of 300-odd points from the recent lows but on Tuesday, it gave up a quarter of its recovery. Going into trade on Wednesday, we expect a quiet start to the session. The Index has taken support at its 50-DMA and this level would be important to watch for at Close levels. However, some corrective pressure may remain on the Markets but any breach below 50-DMA will take the Markets lower.

Wednesday’s session will see the levels of 10265 and 10300 playing out as immediate resistance levels. Supports come in at 10180 and 10135 levels.

The Relative Strength Index – RSI on the Daily Chart is 49.9515 and it stays neutral showing no divergences against the price. The Daily MACD is currently bearish trading below its signal line but it is sharply moving towards positive crossover in coming days. An Engulfing

Bearish Candle has emerged. However, this formation cannot be read in an isolated manner. It should be read in context of the overall structure of the Charts and its place of occurrence. In the current scenario, its formation remains insignificant.

The pattern analysis shows the Markets remaining in the falling intermediate channel on the Daily Charts. It continues to face resistance in the 10360-10380 levels.

Overall, the weakness that we saw in the Tuesday’s session came in little early. Resistance was expected but it was expected in the 10360-10380 zones. These levels will still continue to pose resistance to any pullback that the Markets may see. The Markets are in very close vicinity of the 50-DMA and this would be an important support to watch at the Close levels. Any meaningful breach below 50-DMA might induce some more weakness in the Markets. We advice a cautious view on the Markets, we also recommend keeping overall exposures modest while avoiding shorts.