Gemstone Equity Research & Advisory Services

Thursday, January 18, 2018

MARKET OUTLOOK FOR THURSDAY, JAN 18, 2018

MARKET OUTLOOK FOR THURSDAY, JAN 18, 2018

In our previous note, we had mentioned about the Equity Markets exhibiting a continued buoyant intent despite some signs of consolidation. While trading on analyzed lines, the Indian Equity Markets saw a tepid start to the trade on Wednesday. After initial limited downsides, the benchmark NIFTY50 saw a remarkable recovery and went on to end the day at fresh lifetime highs while posting gains of 88.10 points or 0.82%. Going into trade on Thursday, we expect this up move to continue. Speaking purely on a technical note, with the Markets ended near the day’s high on Wednesday, the up move is likely to extend itself, at least in the initial trade.

The levels of 10810 and 10850 will play out as resistance area for the Markets. Supports come in at 10750 and 10715 zones.

The Relative Strength Index – RSI on the Daily Chart is 72.2986. It shows a Bearish Divergence as the NIFTY has scaled a fresh 14-period high but RSI has not done so. Also, RSI is now in overbought territory. The Daily MACD stays bullish while trading above its signal line. A big white candle that has emerged after a brief consolidation is significant and indicate that some more up sides may be seen.

Going by the pattern analysis, after breaking out above 10490-mark, NIFTY was seen taking breather in form of some brief consolidation. It is now seen attempting to move out of that brief consolidation.

The Markets are seen attempting to move out of a brief consolidation that is created during last couple of sessions. If NIFTY confirms this then it can result into some more up move. The F&O figures continue to indicate a strong undercurrent as well. It indicates that in event of Markets facing some profit taking, it would still remain range bound and it shows no signs of any exhaustion of the uptrend. We continue to recommend making purchases with any minor profit taking dip if that is witnessed. While protecting profits at higher levels, shorts should strictly be avoided as undercurrent remains explicitly bullish.

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 17, 2018

MARKET OUTLOOK FOR WEDNESDAY, JAN 17, 2018

MARKET OUTLOOK FOR WEDNESDAY, JAN 17, 2018

The Indian Equity Markets halted their winning streak as it chose to consolidate, though in a bit volatile manner. The Markets remained under modest pressure immediately since opening in the green and finally ended the day with NIFTY50 losing 41.10 points or 0.38%. Going ahead from here, the NIFTY has established 10800-mark as its all important immediate resistance and we will see the Index oscillating in a defined range while continuing to resist at this point. It should be noted that the undercurrent remains evidently bullish and we will not see any significant downsides but will certainly see some consolidation happening.

The levels of 10745 and 10800 will play out as immediate resistance area for the Markets. Supports come in at 10645 and 10610 levels.

The Relative Strength Index – RSI on the Daily Chart is 67.7798 and it has just crossed below from a topping formation. It does not show any bullish or bearish divergence and stays neutral. The Daily MACD continues to remain bullish while trading above its signal line. A Engulfing Bearish candle on the Charts show that the up move may temporarily be halted and we may be pushed into some short consolidation once again.

The pattern analysis show the NIFTY halting its up move after breaking above the 10490-mark. Having said this, it continues to display buoyant undercurrent and points towards some range bound consolidation and no major downsides.

All in all, we may see this consolidation persist for some time however; the possibilities are very less that any major downtrend will emerge. At the most, we expect the Markets to oscillate in a broad range while some volatility will remain ingrained in the Markets. With no signs of any major downsides whatsoever, we recommend refraining from creating any major short positions. Though cash should be preserved and it is advised to remain highly stock specific. However, long bias should be maintained while approaching the Markets on a cautious note.