Gemstone Equity Research & Advisory Services

Friday, November 24, 2017

MARKET OUTLOOK FOR FRIDAY, NOV 24, 2017

MARKET OUTLOOK FOR FRIDAY, NOV 24, 2017

It was for the fourth day in a row that the benchmark NIFTY50 desist from giving a clear upward breakout from the 10346-10365 levels and continued to consolidate. It ended with a modest gain of 6.45 points or 0.06% on Thursday after seeing a smart recovery from the low point of the day. Markets not retracing from the current levels is certainly a sign of strength. However, going into trade on Friday, we will still have to watch 10365 level until it is breached comprehensively on the upside.

The levels of 10365 and 10395 will continue to pose resistance for the fourth day in a row. The supports come in at 10280 and 10200 zones.

The Relative Strength Index – RSI on the Daily Chart is 58.2127 and it continues to remain neutral showing no divergences against the price. The Daily MACD continues to trade below its signal line and it remains bearish. Candles continued to portray gross indecisiveness on part of the Market participants.

The pattern analysis confirms the intermediate resistance of 10345-10365 zones. However, with the creation of each marginal high, the Markets are currently escaping to formation of a definitive lower top. The NIFTY has pulled back after suffering a 100% throwback and the breaching of the 10365 comprehensively on the upside will see it scaling further highs.

All and all, there is no doubt that the Markets have continued to display some inherent strength and it is not declining after repeatedly testing its resistance zones of 10345-10365 zones. However, until those levels are breached on the upside comprehensively, we will not see any meaningful up move. Also, unless the NIFTY moves past those levels, we cannot under estimate the potential resistance in this area just because the NIFTY is not drifting down much. Over all, for a meaningful up move, we will have to wait for the NIFTY crossing this important immediate hurdle and until this happens, as we have been doing over past several sessions, should approach the Markets with a highly cautious stock specific view while protecting profits vigilantly at higher levels.

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, November 23, 2017

MARKET OUTLOOK FOR THURSDAY, NOV 23, 2017

MARKET OUTLOOK FOR THURSDAY, NOV 23, 2017

We had referred to the importance of the resistance area of 10345-10365 zones in our yesterday’s note and had underlined the necessity of the Markets to move past it for a continued up move. The Wednesday’s session played out exactly on the analyzed lines as the Markets opened positive but came off after testing 10368. The benchmark NIFTY50 ended the day gaining 15.40 points or 0.15%. Going into trade on Thursday, the analysis remain on similar lines as the levels of 01345-10365 will continue to pose resistance to the Markets. A quiet opening is expected but it would be of paramount importance for the Markets to move past these levels for a meaningful up move.

The levels of 10365 and 10390 will once again continue to act as immediate resistance to the Markets. Supports come in 10250 and 10200 marks.

The Relative Strength Index – RSI on the Daily Chart is 57.7557 and it continues to remain neutral showing no divergences against the price. Daily MACD is bearish as it trades below its signal line but it is seen sharply narrowing its trajectory. The Spinning Top on the Candles continued to portray indecisiveness on the part of the markets participants.

The pattern analysis very explicitly shows the tentative mood of the Markets. After taking support near the 100-DMA, the NIFTY presently has managed to precariously hang on to the short term 20-DMA.

All and all, as we often mention, that without disputing the broad uptrend, the levels of 10345-10365 zones are very important levels to watch. The tentative and indecisive mood of the Markets is very much evident and it would be once again fair to conclude that until these levels are breached on the up side, not meaningful gains would be seen. Given the tentative mood of the Markets and reading along with the F&O data for the immediate short term, we continue to recommend vigilantly protecting profits at higher levels adopting a cautious view on the Markets.