Gemstone Equity Research & Advisory Services

Tuesday, January 23, 2018

MARKET OUTLOOK FOR TUESDAY, JAN 23, 2018

MARKET OUTLOOK FOR TUESDAY, JAN 23, 2018

The Indian Equity Markets continued to rally and went on to scale yet another peak while the benchmark Index NIFTY50 ended the day with a decent gain of 71.50 points or 0.66%. After a tepid start and a range bound trade in the first half of the session, the buoyancy returned once again. While going into trade on Tuesday, we expect the levels of 10880-10900 acting as a strong base. Though a quiet to modestly positive start is expected, there are heightened chances that the Markets encounter consolidation in a defined range while individual stocks continue to out-perform.

The levels of 10990 and 11075 will act as immediate resistance levels for the Markets. Supports come in at 10900 and 10865 zones. The range of the NIFTY has widened owing to the unabated move on the upside.

The Relative Strength Index – RSI on the Daily Chart is 79.2404. It has marked a fresh 14-period high which is bullish. However, it trades in overbought territory. The Daily MACD remains firmly in continuing buy mode and it is bullish while trading above its signal line.

The pattern analysis shows the up move remaining firmly in place. The NIFTY has ended in a unchartered territory and has shifted its base much higher at 10490-mark after breaking out above those levels.

We have to take note of the fact that the NIFTY now trades much overbought. However, being overbought is a sign of strength and it is no reason to sell. However, it may induce some consolidation at higher levels. The NIFTY has continued to close above the upper Bollinger band and this applies that the current breakout and the up move that we are witnessing may continue. However, given the fact that the Bollinger bands are 45.40% wider-than-normal, there are probabilities of NIFTY returning within a rage in coming days. In any case, this translates into buoyant outlook with limited downsides in the Markets. Some consolidation is expected but it is advised to continue to make purchases while guarding profits at higher levels.

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 22, 2018

MARKET OUTLOOK FOR MONDAY, JAN 22, 2018

MARKET OUTLOOK FOR MONDAY, JAN 22, 2018

The show of strength continued in the Indian Equities as after spending major part of the session with very limited gains, the benchmark NIFTY50 inched higher, set yet another lifetime high and ended the day with net gains of 77.70 points or 0.72%. While the Markets consolidated until later afternoon trade, there was no sign of any profit taking and stock specific action continued with each minor dip being bought into. Speaking purely on the technical ground, since we have ended near the high point of the day, there are high probabilities that we see a modestly positive start and the NIFTY extending its gains, at least in the initial trade.

The levels of 10910 and 10965 will play out as immediate resistance levels for the Markets. Supports come in at 10845 and 10810 zones.

The Relative Strength Index – RSI on the Daily Chart is 76.7650 and it has formed a fresh 14-period high which is bullish. It presently trades in overbought territory. Daily MACD remains firmly in buy mode while trading above its signal line. No significant formations were seen on Candles.

The pattern analysis reaffirms the buoyant intentions of the Markets. It has now successfully moved well past the 10490-mark and is very near to the measured implication of resolution of the pattern. It would be very much critical to see if the Markets continues with the breakout or faces some consolidation at higher levels.

All in all, the session on Monday and thereafter remains extremely critical. The NIFTY has ended above the upper Bollinger bad on both Daily and Weekly Chart. This should usually translate into continued up move and buoyancy in the Markets. However, the overbought nature of the lead indicators warrants some caution at higher levels. There are chances that before continuing with the up move, Markets faces some range bound consolidation once again. However, with undercurrent remaining evidently bullish, all weaknesses should be bought rather than selling all strengths.