WEEKLY MARKET OUTLOOK FOR JUNE 12 THRU JUN 16, 2017
We had mentioned about possibilities of the Markets marking
a fresh high in our previous Weekly note. The benchmark NIFTY50 did mark a
fresh high this week but in the end remained extremely range bound and ended
flat with negligible gains of 14.75 points or 0.15% on a Weekly Note. At this
juncture, we would like to repeat what we have said over last couple of days.
Markets need to be approached with great caution. Even with underlying trend
remaining perfectly intact, the Markets remain prone to short term corrective
action given its overbought nature.
The coming week will see the levels of 9710 and 9775 acting
as immediate resistance levels. The supports come in at 9610 and 9550 zones.
The Relative Strength Index—RSI on the Weekly Chart is
77.2341. It is bullish as it has marked a fresh 14-period high but at the same
time, it trades in overbought zones. The Weekly MACD remains bullish but again
this too trades in overbought range. A spinning top on the Candles on the
Weekly chart further suggest caution and indecisiveness amongst the market
participants.
The pattern analysis suggests the breakout that has occurred
from 8900-8950 levels perfectly remaining in force.
Overall, though the primary undercurrent certainly remains
buoyant, we cannot ignore the fact that both major lead indicators of the
Markets remain heavily overbought. The NIFTY remains overbought on Stochastic
too. Given these facts, the coming week is certain to see either range bound movement
in the manner we saw in the previous week or will show some minor corrective
moves. It is advised to approach Markets with great amount of caution.
A study of Relative Rotation Graphs – RRG show that pocked
of out-performance will be seen in REALTY stocks, on the Weekly note, they will
continue to show down in momentum. We will see IT and Metals consolidate its
performance and individually inch upwards. AUTO stocks are likely to
out-perform and we will also see relative out-performance from FMCG and
BANKNIFTY Stocks. Laggards will include ENERGY
and MEDIA.
Important Note: RRG™ charts show you the relative strength and momentum for a group of
stocks. In the above Chart, they show relative performance as against NIFTY
Index and should not be used directly as buy or sell signals.
(Milan Vaishnav, CMT, is
Consultant Technical Analyst at Gemstone Equity Research & Advisory
Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
+91-98250-16331
