Gemstone Equity Research & Advisory Services

Tuesday, April 24, 2018

MARKET OUTLOOK FOR TUESDAY,APR 24, 2018

MARKET OUTLOOK FOR TUESDAY,APR 24, 2018

In what can be termed as a classical consolidation, the Markets failed to sustain at the high point of the day. Very much on expected lines, the higher levels saw some profit taking coming in and the NIFTY pared nearly 50-points from the high point of the day before it ended the session with a modest gain of 20.65 points or 0.20%. If we discount the out-performance of CNX IT Index, which also came off significantly from the high point of the day, NIFTY would have ended with losses.

As we enter Tuesday’s trade, we expect such consolidation to continue to persist in the Markets. Though downsides, if any, may be limited, the zones of 10610-10640 will continue to pose good resistance to any up move in the immediate short term.

Tuesday will see the levels of 10610 and 10650 acting as immediate resistance area for the Markets. On the downsides, the NIFTY may find support near in the 10540 and 10510 levels.

The Relative Strength Index – RSI on the Daily Chart is 63.8164. It has marked a fresh 14-period high once again but remains neutral to the prices showing no divergences. Daily MACD stays bullish while trading above its signal line. A spinning top, indicative of indecisiveness of the Market participants occurred on Candles. Apart from this, no major formations were observed.

Pattern analysis shows that despite evident display of buoyant undercurrent, NIFTY has not been able to move past the important pattern resistance area of 10610-10640 zones. This is the upper area of the broad trading range NIFTY had developed over past couple of months.

Fresh shorts were also seen being created as the NIFTY’s future shed nearly its entire premium. We expect such consolidation to continue to exist in the immediate short term. We also expect volatility to persist owing to expiry of the current derivative series. There are high probabilities that Markets continue to witness profit taking bouts from higher levels. We reiterate to avoid creating any major shorts. It is further advised to continue to utilize volatility and downsides to make select purchases with any downsides or profit taking bouts that the Markets may offer. While keeping overall positions moderate, cautious view is advised for the day.

STOCKS TO WATCH:

Fresh shorts were seen being added in IDFC Bank, JSW STEEL, SOUTH BANK, DHFL, ITC, WIPRO, ICICI Bank, STEEL AUTHORITY, DISH TV, ONGC, HDFC, TATA GLOBAL and NCC.

(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

Monday, April 23, 2018

MARKET OUTLOOK FOR MONDAY,APR 23, 2018

MARKET OUTLOOK FOR MONDAY,APR 23, 2018

Friday’s session continued to witness a typical consolidation as the benchmark index NIFTY50 oscillated in a capped range and ended the day with a nominal loss of 1.25 points or 0.01%. The Markets continued to show resilience as it recovered significantly from the low point of the day before ending flat.

As we enter into expiry, we see that this is not yet the time when we throw caution to the wind. The Markets on the Daily Chart still continue to remain little overstretched. Though we may see buoyancy continuing to persist, we will still need to protect the profits with each up move that we witness.

Monday’s opening is likely to be quiet. The levels of 10580 and 10625 will act as immediate resistance for the Markets. Supports come in at 10530 and 10480 zones.

The Relative Strength Index – RSI on the Daily Chart is 62.6975 and it remains neutral showing no divergence against the price. The Daily MACD stays bullish while trading above its signal line. A spinning top that occurred on the candles signaled indecisiveness on part of market participants.

Pattern analysis shows Markets continuing to resist at a pattern resistance area. This is the upper range of the broad rectangle formation that the NIFTY has formed. Though Markets are expected to move past these levels, it may not happen without some consolidation happening in the Markets.

Overall, despite buoyant undercurrent that is more than evident, there are certain factors which we cannot ignore. The NIFTY PCR (Put to Call Ratio) still continues to remain at elevated levels. Also, the sharp decline in volatility (VIX) also signals calmness in the Markets. This calmness may become complacency and may itself become cause of return of some volatility. We will also see expiry happening this week as well. If we take a cumulative view of all of these factors, though it may not be a time to start shorting the Markets but it is certainly a time where we continue to protect our profits vigilantly at higher levels. A cautiously positive view is advised for the day.