Gemstone Equity Research & Advisory Services

Friday, December 22, 2017

MARKET OUTLOOK FOR FRIDAY, DEC 22, 2017

MARKET OUTLOOK FOR FRIDAY, DEC 22, 2017

The session on Thursday remained quite lackluster as the Markets headed nowhere and spent the session in a narrow range. The benchmark NIFTY50 oscillated in a 30-point range and finally settled the day with a modest loss of 3.90 points or 0.04%. The Markets continued to consolidate and going ahead for trade on Friday, we expect this consolidation to continue. The levels of 10490-will continue to pose serious resistance and given the extended weekend this time, we will also see some cautious outlook weighing on the Markets. For any serious up move to occur, the Markets will have to take out the levels of 10490 comprehensively and this may not happen too soon too fast.

The levels of 10490 and 10535 will continue to pose serious resistance to the Markets. The Supports come in much lower at 10375 and 10280 zones.

The Relative Strength Index – RSI on the Daily Chart is 60.7827 and continues to stay neutral against the price. The Daily MACD is bullish while trading above its signal line. No significant formations were observed on Candles.

While having a look at pattern analysis, the NIFTY has comfortably moved outside the falling channel and have tested the 10490-mark on expected lines. However, given the overall structure on the Charts, we are likely to see some more consolidation happening before we see any comprehensive and sustainable breakout.

Overall, it is also worth taking note that the short term 20-DMA has cut the 50-DMA from above. The interpretation of this is that if this continues and if the 20-DMA slips significantly below the 50-DMA, it can signal loss of momentum for the Markets in the immediate short term. With Monday being a trading holiday, we are likely to see consolidation happening on a cautious note in the Markets. It is required that the Markets are approached with a highly stock specific focus and on a very cautious note.

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, December 21, 2017

MARKET OUTLOOK FOR THURSDAY, DEC 21, 2017

MARKET OUTLOOK FOR THURSDAY, DEC 21, 2017

Very much as analyzed in our previous note, the benchmark NIFTY 50 did attempt to inch higher and test the 10490-mark, but it also faced stiff resistance to those levels. The Index after a marginal high saw corrective pressure in the second half of the session. The NIFTY finally ended the day with net loss of 19 points or 0.18%. Thursday’s trade is likely to remain in similar lines. The Markets may see a quiet opening and may also show some buoyant intent but the levels of 10490 will continue to post stiff resistance to the Markets and force it into some more consolidation.

The levels of 10490 and 10535 will pose resistance to the Markets on Thursday. The supports come in at 10350 and 10310 zones.

The Relative Strength Index – RSI on the Daily Chart is 61.1090 and it stays neutral showing no divergence against the price. The Daily MACD stays in buy mode while trading above its signal line. On Candles, a not-so-classical Dark Cloud occurred. The size of the candle is relatively small than what is usually required in such formation but this often reiterates the credibility of the resistance area where it occurred.

While having a look at pattern analysis, the NIFTY has managed to move out of the intermediate falling channel that it had created. However, it has inched higher but has met with a stiff resistance at its previous high. Also, the lead indicators remain neutral while marking a lower top though not confirming it.

All in all, while going into trade on Thursday, we recommend maintaining highly stock specific approach to the Markets. We will see select components from specific sectors like INFRA, MEDIA, etc. attempting to relatively out-perform. However, on a broader note, we still expect the Markets to face stiff resistance at 10490-mark despite showing buoyant undercurrent. There are all chances that the Markets may remain vulnerable to selling bouts at higher levels and be forced in consolidation for some more time. Cautious outlook is advised for the day.