Gemstone Equity Research & Advisory Services

Wednesday, February 14, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 14, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 14, 2018

Equity Markets had a relatively stable session on Monday. The benchmark Index NIFTY50 opened higher and stable, inched up further towards the end and ended the day with net gains of 84.80 points or 0.81%. Markets will open after a gap as Tuesday was a trading holiday. As w e go ahead into the trade on Wednesday, we expect the Markets to open on a positive note and continue with its pullback. NIFTY has maintained itself above 10480-10500 mark and this level will remain critical short term support. However, this remain a isolated reading with a caveat that the noting major is abruptly wrong with global indices overnight.

Wednesday will see the levels of 10570 and 10635 playing out as immediate resistance area for the Markets. Supports come in at 10480 and 10410 zones.

The Relative Strength Index – RSI on the Daily Chart is 41.9340. It remains neutral showing no divergences against the price. The Daily MACD remains evidently bearish while trading below its signal line but it is seen flattening its trajectory. A rising window emerged on Candles. This essentially implies a gap up and continuation of the up move, though it needs confirmation on the next trading day.

Pattern analysis indicate that the NIFTY has so far held and defended the 100-DMA and has taken supports at this important support area on Closing basis. The lower Bollinger band and the 100-DMA merge and this area collectively can act as major support area for the Markets in the immediate short term.

Overall, we expect the pullback to continue to Wednesday with a caveat that there is nothing wrong globally overnight. Having said this, we expect the NIFTY to move towards 10700-10750 zones over coming days. The F&O data too suggests that fresh longs are created with any volatile dip and all up moves and pullbacks have occurred with addition in OI which show addition of fresh long positions. We recommend continuing making fresh purchases and utilize all dips as buying opportunities. Positive and stable outlook 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, February 12, 2018

MARKET OUTLOOK FOR MONDAY, FEB 12, 2018

MARKET OUTLOOK FOR MONDAY, FEB 12, 2018

Friday’s session had seen a lower opening on back of overnight rout in US Markets once again but the Indian Markets resiliently limited its losses. Even with the resilient performance, the benchmark NIFTY50 ended the day on Friday with net loss of 121.90 points or 1.15%. If we take a singular and isolated reading of domestic technicals, the NIFTY has slipped below the 10500-mark. We are likely to see a positive opening as the Index has ended at its intraday high point and has piled up huge Open Interest leading to likely short covering on Monday.

However, we cannot take a isolated reading as we remain affected by global happenings. Even if we take a look globally, US Markets saw wild swings on Friday night, after swinging 800 points on either side, ended with a gain of 330-points. This is further likely to aid a possible positive opening on Monday.

Monday will see the levels of 10565 and 10630 playing out as immediate resistance area. Supports are expected to come in at 10430 and 10350 zones.

The Relative Strength Index – RSI on the Daily Chart is 36.7560. This time a Bullish Divergence is observed as the NIFTY set a fresh 14-period low while RSI did not do so. The Daily MACD still remains bearish while trading below its signal line. No significant formations were seen on Candles.

While having a look at pattern analysis, the NIFTY50 has slipped marginally below the immediate support of 10480-10500 zones. However, it has successfully held 100-DMA which stands at 10371.

Overall, it would be technically important for the Markets to crawl up and move past 10500-mark. It would be necessary to move past this 10500-mark to avoid any further weakness. Much of the venom in the system is seen out for the immediate short term. However, volatility is likely to remain we will see Markets oscillating in a defined range. We reiterate to keep exposures at modest levels and continue to buy good quality stocks with corrective dips, if any. Shorts should be avoided while maintaining a cautious outlook on the Markets.