Gemstone Equity Research & Advisory Services

Thursday, March 22, 2018

MARKET OUTLOOK FOR THURSDAY, MAR 22, 2018

MARKET OUTLOOK FOR THURSDAY, MAR 22, 2018

In what seemed to be a strong and sustainable pullback on Wednesday, the NIFTY failed to sustain above the 200-DMA levels. The intraday gains fizzled out and Markets came off significantly from the high point of the day. After great amount of volatility, NIFTY ended the day with a modest gain of 30.90 points or 0.31%. The NIFTY has resisted to the 200-DMA at Close levels after breaching that level a day before. The levels of 200-DMA will continue to pose a threat to the NIFTY in the immediate short term.

Going into trade on Thursday, we expect a similar behavior from the Markets. A modestly positive opening to the trade is expected once again but it would be imperative for the Markets to move past the 200-DMA mark which stands at 10168. Longer the Markets remain below 200-DMA, more vulnerable it will remain to the selling bouts.

Thursday will see the levels of 10170 and 10245 playing out as immediate resistance area for the Markets. Supports come in at 10040 and 9980 zones.

The Relative Strength Index – RSI on the Daily Chart is 38.0574 and it remains neutral showing no divergence to the price. Daily MACD continues to remain bearish while trading below its signal line. No significant formations were seen on the Candles.

Going by the pattern analysis, it is seen that the NIFTY did breach its 200-DMA levels at Close a day before but stayed within its filters. A pullback was attempted but it resisted at the 200-DMA which it had marginally breached in the previous session.

Overall, NIFTY still continues to remain on tenterhooks on expected lines. It would be important for the Markets to move past and sustain above the 200-DMA at the earliest to form a temporary bottom once again. Staying below the 200-DMA for long will increase the vulnerability of the Markets for some more weakness. However, the oversold nature of important oscillators on both Daily and Weekly Charts point towards larger chances of a technical pullback. While remaining moderate on the overall positions, continuance of a cautious outlook is advised for the day.

STOCKS TO WATCH:

Fresh longs were seen being added in stocks like JSW STEEL, DLF, PFC, RPOWER, BHARTI AIRTEL, RECLTD, ITC, NTPC, ASHOK LEYLAND, MARICO, ONGC, RELIANCE CAPITAL and RELIANCE INDUSTRIES.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)

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, March 21, 2018

MARKET OUTLOOK FOR WEDNESDAY, MAR 21, 2018

MARKET OUTLOOK FOR WEDNESDAY, MAR 21, 2018

Despite ending below 200-DMA on the previous day, Tuesday’s trade saw a volatile attempt by the Indian Markets to keep itself afloat and avoid any serious breakdown. The benchmark Index NIFTY 50 saw itself in a capped range during the day oscillating back and forth while struggling to keep its head above the crucial 10040-mark. The Markets finally ended with net gains of 30.10 points or 0.30%.

As we approach Wednesday’s trade, we can expect technical pullback by the Markets. A modestly positive start is expected but in any case NIFTY will have to move past the 10166-mark to stay successfully afloat and avoid any major breakdown. 10166 is the 200-DMA. Given the oversold nature of the oscillators, even if the NIFTY does not immediately find its bottom, there are larger chances of a pullback than a outright breakdown from current levels.

The levels of 10166 and 10245 will act as immediate resistance for the Markets. Crucial supports come in at 10040 and 9980 zones.

The Relative Strength Index – RSI on the Daily Chart is 36.0100 and it remains neutral showing no divergences against the price. The Daily MACD is bearish while it trades below its signal line.

Pattern analysis shows that the NIFTY has continued to resist to the 200-DMA on the upside while attempting to pullback. It will have to move past 10166-mark at the to have a sustainable and serious pullback. Until this happens, NIFTY remains vulnerable to volatile oscillations with 10040 acting as its support.

Overall, NIFTY is not completely out of the woods as yet but it certainly remains oversold on some oscillators. This makes it likely that even if it remains in continuing downtrend, it gives some decent technical pullback. However, the moving past and closing above 10166 will be crucial for the NIFTY to avoid any major breakdown. We will recommend avoiding any major shorts at this juncture. Cash should be preserved and extremely select stock specific purchases may be made. Continuance of cautious outlook is advised until we see NIFTY moving past 10166 in a convincing manner.