Gemstone Equity Research & Advisory Services

Tuesday, January 2, 2018

MARKET OUTLOOK FOR TUESDAY, JAN 02, 2018

MARKET OUTLOOK FOR TUESDAY, JAN 02, 2018

Indian Equity Markets had a turbulent start to the new year as the benchmark NIFTY50 remained range bound throughout the day but saw a sharp decline in the last your of the trade. The Index ended the day losing 95.15 points or 0.90%. Though there is no technical breakdown on the Charts, the Monday’s session remain technically important and it has certainly pushed the NIFTY into some more time under consolidation. On Tuesday, we see a quiet opening to the Markets. We may see some lower volumes as well as the participation in the Markets will remain affected due New Year holidays.

The levels of 10465 and 10510 will play out as important resistance levels to watch out for on Tuesday. Supports come in lower at 10380 and 10345.

The Relative Strength Index – RSI on the Daily Chart is 55.2808 and it remains neutral showing no divergence against the price. The Daily MACD continues to stay bullish remaining in continuing buy mode. An engulfing bearish candle has emerged. It remains significant as it has occurred at the resistance zone of 10490-10535 and therefore it reinforces the credibility of this resistance area.

The pattern analysis reveals the importance of the 10490-10535 support zones. The Markets have once again failed to confirm the attempted breakout twice from these levels. This zone will continue to act as immediate short term resistance for the Markets.

Failing to clear the 10490-10535 zones for the second time has shown the credibility of this resistance area. Failure to clear the 10490-10535 zones has made some more consolidation imminent in the Markets. There is no structural breach on the Charts but these levels will continue to resist until we see a comprehensive breakout above this resistance area. Going into trade on Tuesday, selection of stocks will hold the key. We recommend avoiding shorts and trimming exposures with any potential up move and protecting profits. Due to New Year holiday season, the volumes will remain affected and this may also infuse some lack of depth and volatility in the Markets. Cautious outlook is advised 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

Monday, January 1, 2018

MARKET OUTLOOK FOR MONDAY, JAN 01, 2018

MARKET OUTLOOK FOR MONDAY, JAN 01, 2018

The last session of the Year 2017 ended on a buoyant note as the benchmark Index NIFTY50 once again showed inclination to reattempt the earlier failed breakout. The NIFTY ended with a gain of 52.80 points or 0.50%. While we usher into the New Year on Monday, we see the Markets initiating themselves on a modestly positive note. In all likelihood, the up move that was witnessed on Friday will spill over into Monday’s session as well. We may see Markets extending its gains at least in the initial trade. In any case, the levels of 10490 will remain critically important levels to watch out for.

Monday will see 10550 and 10610 playing out as immediate resistance levels for the Markets. Supports come in at 10490 and 10445 zones.

The Relative Strength Index – RSI on the Daily Chart is 66.8111 and though it does not show any failure swing, a Bearish Divergence is observed. The NIFTY marked fresh 14-period high while the RSI did not. The Daily MACD stays bullish while trading above its signal line. No significant formations were observed on Candles.

The pattern analysis shows that the NIFTY attempted a breakout earlier when it moved past the 10490 mark. However, it suffered a throwback and gave up all of its gains from the breakout levels. However, it has attempted to breakout again and a confirmation to this breakout is awaited again.

In any case, if the NIFTY manages to extend its gains and continues with the up move that it witnessed on Friday, we can expect it to test 10600-10630 levels in coming days. However, given the overall structure of the lead indicators on Daily as well as Weekly Charts, we will still need to protect profits very vigilantly at higher levels as sharp profit taking bouts from higher levels cannot be ruled out. Highly stock specific approach with cautious optimism is advised for the day.