Gemstone Equity Research & Advisory Services

Wednesday, May 30, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 30, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 30, 2018

After three days of a robust up move, the Indian Equity Markets took a breather. The benchmark Index NIFTY50 showed minor retracement post quiet opening on Tuesday. The Markets pared some gains as the NIFTY ended the day losing 55.35 points or 0.52%.

As we approach Wednesday’s trade, we enter the penultimate day of expiry current derivative series which happens to be one of the longest ones of the year. We expect the trade to remain dominated with rollover centric activities and also remain highly stock and sector specific.

We once again expect a quiet opening to the Wednesday’s trade. There are chances that Markets may continue to exhibit sluggish behavior with consolidation continuing though it is likely to have limited downsides with the zones of 10580-10600 acting as important pattern supports.

We expect the levels of 10650 and 10710 to act as immediate resistance levels for the Markets. Supports come in at 10600 and 10550 zones.

The Relative Strength Index – RSI on the Daily Chart is 51.8694 and it remains neutral showing no divergence against the price. The Daily MACD still remains bearish. However, it is seen narrowing its trajectory and in absence of any major downsides, this indicator might see positive crossover. On Candles, a small engulfing bearish candle has occurred. Though this candle is very small, relatively speaking. However, it can temporarily stall an ongoing up move.

The pattern analysis show the major pattern supports of 10580-10600 coming into play once again. In event of a continued consolidation, these levels are expected to act as support in the immediate short term.

Overall, in absence of any major triggers, we may see some consolidation continuing in the Markets. This activity is also likely to have very limited downsides, if any. We expect the zones of 10580-10600 acting as important pattern supports. Any further dip may see the NIFTY testing its 100DMA once again. We reiterate to continue to make select purchases while continuing to vigilantly protect profits at higher levels.

STOCKS TO WATCH:

Long positions were seen being added in stocks like IDEA, JSW STEEL, ADANI POWER, TATA POWER, BHEL, NCC, INFOSYS, SAIL, ASHOK LEYLAND, DABUR, M&M and LARSEN & TOUBRO.

(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

Tuesday, May 29, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 29, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 29, 2018

For the third day in a row, the NIFTY continued to pile gains as the benchmark Index ended the day gaining 83.50 points or 0.79%. With Monday’s trade which also marked a strong beginning to a new week, the NIFTY has tested its 20-DMA and has attempted to move past it.

Going into trade on Tuesday, on a broader note, we expect the positive environment to remain in the Markets. The two major positives for the Markets are the sharp decline in Crude oil and also the sharp coming off of the US10YR Bond Yields which are technically aiding the Markets.

We expect a quiet start to the trade today but we expect that despite some minor consolidation that we might encounter, the NIFTY is likely to see itself on its advancing trajectory. The caution towards possible consolidation comes from the fact that NIFTY has risen just short of 300-points from the lows seen three sessions back.

Tuesday is likely to see the levels of 10745 and 10790 acting as immediate resistance area for the Markets. Supports come in at 10645 and 10600 mark.

The Relative Strength Index –RSI on the Daily Chart is 55.6517 and it remains neutral showing no divergence against the price. The Daily MACD is still bearish as it trades below its signal line. On the Candles, a rising window occurred. This usually a candle gapping above the previous one and often indicates potential continuation of up move.

The pattern analysis show NIFTY firmly on its pullback trajectory after validating support of 50-DMA at Close levels and pulling back and moving past its 100-DMA as well.

Overall, though the momentum may not be blindly chased, the overall set up looks buoyant and we may see continuation of up move with a minor chances of some consolidation happening. We will continue to see stock specific performance from sectors like financial services and FMCG. Apart from this, isolated stock specific purchases may also be seen. We recommend continuing making smart purchases while continuing to protect profits at higher levels.