Gemstone Equity Research & Advisory Services

Friday, October 6, 2017

MARKET OUTLOOK FOR FRIDAY, OCT 06, 2017

MARKET OUTLOOK FOR FRIDAY, OCT 06, 2017

After a stable and positive start, the benchmark NIFTY50 gave up its gains to end in the red losing 26.20 points or 0.26%. The important technical factor to take note of in Thursday’s session was that the NIFTY resisted to the upward rising trend line of the channel that it has breached on the downside. Also, this coincided with the 50-DMA which stand at 9944.43 today. Going into trade tomorrow on Friday and subsequently, this level of 50-DMA will continue to pose resistance to the Markets at Close levels. We can see some consolidation happening after nearly 250-point pullback from 9685 levels.

Friday will see the levels of 9945 and 9970 playing out as resistance area. Supports come in at 9830 and 9780 zones which also coincide with the 100-DMA of the Markets.

The Relative Strength Index – RSI on the Daily Chart is 47.0801 and it continues to stay neutral with regard to the price and does not show any divergence. The Daily MACD continues to move sharply towards positive crossover but it is currently bearish while trading below its signal line.

The pattern analysis show the NIFTY resisting fiercely to the trend line of the upward rising channel and this also coincides with the 50-DMA levels. This trend line was earlier the support that the NIFTY broke on the downside and it is now acting as its resistance.

All and all, after a 250-point pullback of NIFTY from the supports of 9685, we can expect the Markets to take some breather and consolidate. Until the NIFTY moves past the 50-DMA comfortably, we can see all up moves meeting with profit taking bouts from higher levels. Overall, coming days will see the Markets remaining more stock specific and we can expect to see the Index oscillate within a given range.

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

Thursday, October 5, 2017

MARKET OUTLOOK FOR THURSDAY, OCT 05, 2017

MARKET OUTLOOK FOR THURSDAY, OCT 05, 2017

Very much on expected lines, the Indian Equities continued with their pullback as the benchmark NIFTY50 ended the day with net gains of 55.40 points or 0.56%. The NIFTY has breached the upward rising channel in the recent decline and therefore, the upward rising trend line was expected to pose resistance to the Markets. In line with this analysis, the NIFTY continued to resist to this upward rising trend though the under current remained much buoyant. Going into trade on Thursday, we continue to expect a modestly positive start but the zones of 9915-9945 will continue to pose resistance to the Markets. Once the Markets end the day above 9945 which is the 50-DMA, we would be back into the upward trading channel.

The levels of 9945 and 9980 will act as resistance area for the Markets. Supports come in at 9850 and 9815 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.9364 and continues to remain neutral showing no divergences against the Price. The Daily MACD continues to narrow its trajectory moving towards the positive crossover in coming days. No significant formations are seen on Candles.

The pattern analysis show that the NIFTY is resisting to the upward rising trend line of the rising channel formed over last couple of months. This trend line was its support when the Index was trading inside the channel. But after a negative breach, the same support is now acting as its resistance.

Though the levels of 9945 remain a critical level to watch at Close, there are higher chances that the NIFTY will be able to move past it in coming days. All the up moves have come with a solid rise in Open Interest and this may prevent major downsides and acts as a positive indicator. Banking stocks will react to the RBI Policy review wherein it kept the rates unchanged but slashed the SLR. While completely avoiding shorts, select buying may be continued while maintaining a positively cautious view on the Markets.