Gemstone Equity Research & Advisory Services

Thursday, June 21, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 21, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 21, 2018

Markets saw a modest technical pullback as the benchmark Index NIFTY ended the day with net gains of 61.60 points or 0.58%. A mildly positive start to the trade strengthened further and this resulted into the Markets pulling back and ending with gains. The up move was led by short covering but it remained important as the NIFTY held on to its short term support of 20-DMA.

We expect this mild up tick that we witnessed to percolate into Thursday’s trade as well. A modestly positive and quiet opening is expected. However, it should not be ignored that the NIFTY still continues to remain in a broad symmetrical triangle formation and will continue to face pattern resistance of the falling trend line joining the lower tops.

Thursday will see the levels of 10810 and 10840 playing out as important resistance zone for the Markets. Support comes in at 10750 and 10710 levels.

The Relative Strength Index – RSI on the Daily Chart is 54.6358 and it stays neutral showing no divergence against the prices. The Daily MACD has reported a negative crossover and it has turned bearish while it trades below its signal line. On the Candles, a pattern resembling a Bullish Harami has emerged. It remains significant as it has occurred after a corrective move. It also remains significant as it has arisen from a combination of black/white candle with the white body remaining completely encompassed by the preceding black body.

Pattern analysis shows that NIFTY still continues to remain in a broad symmetrical triangle pattern and remains susceptible to resistance coming in from the falling trend line ahead which joins subsequent lower tops from 11170 zones.

Overall, as of today, NIFTY has validated its short term support area of 20-DMA and this is followed by the 50-DMA which remains in its close vicinity. We expect the coming session to remain dominated with stock specific activities. With the NIFTY continuing to remain under a large pattern formation, it would be prudent to continue to protect profits at higher levels until NIFTY resolves the present pattern formation on either side. While remaining highly stock specific, cautious view is advised for the day.

STOCKS TO WATCH:

Relative resilient technical set up is observed in stocks like CGPOWER, ADANI POWER, YES BANK, TATA MOTORS, TATA STEEL, RELIANCE, RELIANCE CAPITAL, NHPC, EXIDE, TATA POWER and M&M FINANCIAL.

(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, June 20, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 20, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 20, 2018

Tuesday’s session saw the Indian Equity Markets remaining gripped in a downward trajectory as the benchmark Index NIFTY50 slipped further and ended the day losing 89.40 points or 0.83%. The Markets remained in falling trajectory throughout the session and at no point of time did it make any attempt to recover.

As we approach Wednesday, there are mild chances that the Markets attempts to stabilize as it currently rests on its short term 20-DMA. However, there are higher chances that we may see some amount of weakness persisting in the Markets. In anyway, no runaway technical pullback is expected from the Markets. The opening is expected to be tepid.

We are likely to see the levels of 10745 and 10820 acting as immediate resistance area for the Markets. Supports come in at 10690 and 10650 zones.

The Relative Strength Index –RSI on the Daily Chart is 50.2903 and it remains neutral showing no divergence against the price. The Daily MACD still remains bullish while trading above its signal line. However, it is seen narrowing its trajectory. On the Candles, a big black body occurred. This reinforces the credibility of the resistance area of the 10820-10850 zones.

Pattern analysis shows that NIFTY is currently forming a large symmetrical triangle formation as evident on the Daily Charts. The NIFTY is resisting to the falling trend line of this formation drawn from 11170 which joins the subsequent lower tops.

Overall, it is just that NIFTY has rested on its short term 20-DMA, we expect some stability to come in. However, with lack of any major trigger and with the present technical structure, we might continue to see tepid behavior from the Markets. The important support now come in the form of 50-DMA which remain in close vicinity at 10653. This is likely to act as important support at Close levels. Overall, in any case, we do not expect any runaway technical pullback to occur. We expect Markets to remain range bound and expect the session remaining highly stock specific. While keeping overall exposures at modest levels, cautious outlook is advised for the day.