WEEKLY MARKET OUTLOOK FOR AUG 28 THRU SEP 01, 2017
In our previous Weekly Note, we had categorically mentioned
that the NIFTY will head nowhere. It will neither see any breakdown nor will it
see any runaway up move. Keeping in line with this analysis, the benchmark
NIFTY50 headed nowhere but consolidated in a much capped range. NIFTY ended the
week with net gains of 19.65 points or 0.20%. We keep our analysis on similar
lines for coming week as well. We do not see NIFTY making a major up move given
the divergent signals of the Daily and Weekly Charts. We will see the Markets
resisting at higher levels and on similar lines, we do not see any major
breakdown on Charts as well.
Coming week will see the NIFTY finding resistance at 9950
and 10150 zones, supports will come in at 9810 and 9685 levels.
The Relative Strength Index – RSI on the Weekly Charts is
64.5047 and it remains neutral showing no divergences against the price. The
Weekly MACD stays bearish as it trades below its signal line. On the Candles, a
Long Lower Shadow has occurred. Such signals are usually bullish if they occur
near support levels or when a security is oversold. However, in the present
circumstance it holds very little significance.
The pattern analysis show the Markets trading well within
the 18-month upward rising channel as evident on the Charts. Even if the NIFTY
show some more retracement but stays within this Channel, it would be
continuation of a perfectly healthy correction.
Overall, we do not see the Markets making any major headway
on the upside during the coming week. In the same breadth, we do not see any
major downsides as well. Markets will attempt to take cues from Jackson Hole
symposium and is likely to remain volatile. Distinctly weak set up on US
Treasuries and 10-YR US Bond Yields is likely to act in overall favor of
Emerging Markets. Further, Indian Markets have underperformed its Asian Markets
in previous 3 sessions. This will overall keep downsides limited and keep the
NIFTY in a defined broad trading range over coming week.
A study of Relative Rotation Graphs – RRG show that METAL
stocks are distinctly gaining momentum and will continue to remain strong in
the coming week. ENERGY Stocks along with METAL and IT are likely to continue
to relatively outperform the NIFTY. Broader Indices like CNX100 and NIFTYJR
(NIFTY Next 50) are also seen gaining momentum and stock specific performance
will be seen in these two Indices as well. MEDIA, FMCG, CNXMID, REALTY along with PHARMA are likely to lose
momentum on Weekly basis. AUTO is likely to continue to under-perform.
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:
CMT Association (Formerly Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
International Associate Member:
Society of Technical Analysts, STA (UK)
+91-98250-16331
