Gemstone Equity Research & Advisory Services

Tuesday, June 19, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 19, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 19, 2018

The Markets spent nearly entire session on Monday in a much capped and narrow range in which NIFTY ended the day with minor losses losing 17.85 points or 0.17%. Given the fact that the session remained extremely range bound, important thing to note was that NIFTY’s struggle with the zones of 10820-10850 continued and the Markets failed to move past this important pattern resistance.

As we step into Tuesday’s trade, we feel that some weakness might persist and NIFTY might remain under modest pressure but the downsides are likely to remain limited. On the upper side, the struggle with the zones of 10820-10850 is likely to continue. Behavior of the Markets vis-à-vis this level is extremely important to watch for in coming days.

Tuesday will continue to see the levels of 10850 and 10895 continuing to act as important resistance area. Supports come in at 10765 and 10710 zones.

The Relative Strength Index – RSI on the Daily Chart is 57.7446. RSI continues to remain neutral showing no divergence to the price. The Daily MACD stays bullish while trading above its signal line. A small black body occurred on Candles. In the present context, it holds no significance.

Pattern analysis shows that NIFTY continues to resist to the falling trend line resistance area of 10820-10850 zones. Breach on the upside of these levels is necessary for any meaningful up move to occur.

Overall, while NIFTY continues to resist to the falling trend line that joins the high of 11170 to the subsequent lower tops, it also continues to show some inherent strength by consolidating around the resistance area without showing any major declines. The present amount of shorts in the system is likely to keep the overall downsides limited. However, in the same breath, unless NIFTY moves past 10820-10850 zones and sustain above that, it will remain vulnerable to pressure from higher levels and some prolonged consolidation. We recommend remaining modest on exposures, preserve cash and make select purchases with each available opportunity.

STOCKS TO WATCH:

Long positions were seen being added in IDEA, EQUITAS, SAIL, ADANI ENTERPRISES, POWER GRID, BHEL, BATAINDIA, TATA MOTORS, NBCC, UJJIVAN, ICICI BANK, TVS MOTORS, EXIDE and ASIAN PAINT.

(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, June 18, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 18, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 18, 2018

Consolidation continued in Friday’s trade as the benchmark Index ended the day gaining 9.65 points or 0.09%. The Markets saw a modestly positive start but later slipped under some corrective pressure. However, NIFTY recovered 60-points from the low point of the day before ending with modest gains.

As we step into fresh week we expect a flat start to the trade. The NIFTY has been consolidating near its pattern resistance area. For tomorrow and for coming days, it would be imperative for the Markets to move past 10820-10850 zones for resumption of any meaningful up move.

Monday is likely to see the levels of 10850 and 10895 acting as immediate resistance area. Supports come in at 10765 and 10710 zones.

The Relative Strength Index – RSI on the Daily Chart is 59.3764 and it remains neutral showing no divergence against the price. The Daily MACD stays bullish while trading above its signal line. On the Candles, a candle with a long lower shadow occurred. In the present context, it holds little significance as it has occurred during an upside. However, since it has also occurred after some consolidation, it offers mild possibilities of fresh attempt by NIFTY for a resumed up move.

Going by pattern analysis, NIFTY has continued to resist to the falling trend line that begins from 11170 and then subsequently joins the lower tops. It would be critically important for NIFTY to move past the 10820-10850 zone for resumption of any meaningful up move.

Overall, the undercurrent continues to remain buoyant and the F&O data also suggests NIFTY has some more steam left and it may attempt to move past the pattern resistance area near which it is currently consolidating. However, until the levels of 10820-10850 are breached on the upside, we continue to recommend caution at higher levels and guard profits with each up move. Overall, positive caution is advised for the day.