Gemstone Equity Research & Advisory Services

Thursday, January 4, 2018

MARKET OUTLOOK FOR THURSDAY, JAN 04, 2018

MARKET OUTLOOK FOR THURSDAY, JAN 04, 2018

The Indian Equity Markets consolidated on a positive note today ending virtually flat while gaining just 1 point or 0.01%. However, as it has been happening, the 10490-10535 zones proved to be a strong resistance area for the Markets. The Index saw retracement and paring of gains after testing the high level of 10503.60. There is a divergence in performance of NIFTY even with strongly correlated Asian Markets like Hang Seng. Given the kind of consolidation that the Markets are witnessing and while referring the F&O data, we feel that the Markets may consolidation but with a upward bias only to move up again.

The levels of 10490 and 10535 will play out once again as immediate resistance area for the Markets. Supports come at 10410 and 10375 zones.

The Relative Strength Index – RSI on the Daily Chart is 55.7909 and it continues to stay neutral against the price showing no divergences. The Daily MACD stays bullish while trading above its signal line. A small black body occurred on the Candles. However, this remains insignificant given the present formation.

The pattern analysis show that the NIFTY has continued to resist to the 10490-10535 zones for couple of times now. It makes one thing pretty evident that that for a up move occur and sustain, Markets will have to move past the resistance area of 10490-10535 zones.

Overall, looking at the high correlation that the NIFTY enjoys with Hang Seng Index among Asian peers, and the fact that Hang Seng Index has already broken out from its life time highs, it makes highly probable that the NIFTY may not correct much. There are high probabilities that the NIFTY may just continue to consolidate for some more time but finally resumes its up move. However, until the resistance area of 10490-10535 is breached on the upside, positively cautious approach 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

Wednesday, January 3, 2018

MARKET OUTLOOK FOR WEDNESDAY, JAN 03, 2018

MARKET OUTLOOK FOR WEDNESDAY, JAN 03, 2018

The benchmark Index NIFTY50 continued to witness fierce consolidation as it ended a volatile day of trade on Tuesday nearly flat with minor gains of 6.65 points or 0.06%. The highlight of the session was the serious resistance that the levels of 10490-posed in the morning trade. The Markets immediately retraced once it tested its resistance area. The area of 10490-10535 will continue to remain critically important area that the Markets will have to breach for a comprehensive breakout.

While the levels of 10490 and 10535 will act as immediate resistance area, the levels of 10405 and 10365 will act as supports.

The Relative Strength Index – RSI on the Daily Chart is 55.7205 and it continues to stay neutral against the price. The Daily MACD is bullish as it continues to trade above its signal line. No significant formations are observed on Candles.

The pattern analysis have once again reinforced the credibility of the resistance of the 10490-mark. Going ahead, the zones of 10490-10535 will continue to act as major resistance.

While the mentioned zone of 10490-10535 acts as immediate resistance, the Inter-Market Analysis offers cues as to whether we will see deeper and serious correction or just plain simple range bound consolidation. Our Markets historically enjoys very high and strong correlation with the Hang Seng (Hong Kong Index). This Index has broken above its previous highs and now trades at historically high levels. In all likelihood, we may resume our up move after much under-performance vis-à-vis the Asian peers over previous days.

However, until this happens, we need to approach the Markets with caution. Until the directional up move is re-established, exposures should be kept limited. Highly stock specific approach but positively cautious view is advised for the day.