Gemstone Equity Research & Advisory Services

Saturday, April 28, 2018

WEEKLY MARKET OUTLOOK FOR APR 30 THRU MAY 04, 2018

WEEKLY MARKET OUTLOOK FOR APR 30 THRU MAY 04, 2018

In the week that was, the Indian Equity Markets continued to make a modest advance as the index NIFTY50 inched higher and ended the week gaining 128.25 points or 1.21% on Weekly basis. The volatility in the previous week remained overall less-than-expected and the Markets showed no major signs of any corrective move baring few range bound slightly volatile oscillations. The expiry that happened in the previous week also remained relatively less volatile.

The coming week remains a truncated one with Tuesday being a trading holiday. In the 4-day Week that we have and beyond that, we expect the Markets to continue with it’s up move. However, we might also have to tackle volatile trading environment in coming days. Slightly overstretched oscillators and with volatility remaining at the lowest levels in recent times will keep the Market participants cautious.

The coming Week will see levels of 10790 and 10885 acting as major resistance area for the Markets. Supports come in at 10610 and 10550 zones.

The Relative Strength Index – RSI on the Weekly Charts stand at 60.1670. It remains neutral to the price showing no divergence against the price. Weekly MACD is still bearish while trading below its signal line. However, it is seen sharply moving towards positive crossover over coming days. Apart from a white body that occurred over Candles, no significant formations were observed.

If we run a pattern analysis on the Weekly Charts, it is seen that the NIFTY has ended above the short term 20-Period Moving Average. This means that in routine course of business, we can expect NIFTY to test its upper Bollinger band which stays at 10990. However, it is equally important to note that this is not likely to happen too fast and without any consolidation or minor corrective moves.

Overall, we fairly expect a modestly positive start to the Week and also expect the Markets to remain resilient to volatility, if any, inflicted by global markets. However, we will need to continue to remain cautious about the immensely low volatility that the NIFTY is experiencing. Though we may see NIFTY fairly continuing to advance, it continues to remain vulnerable to volatile profit taking bouts from higher levels. We continue to advise purchasing during dips and at the same time protecting profits very vigilantly at higher levels while effectively rotating sectors.

A study of Relative Rotation Graphs – does not paint an overly worrisome picture. IT Pack is seen losing its relative momentum and is likely to do so in the coming week as well as it is likely to take some breather. On the other hand, FMCG pack will see relative outperformance against general markets. It is likely to be assisted with AUTO, MEDIA, INFRA, MIDCAP, who is seen improving their relative momentum against the general markets. We will also see overall betterment of relative performance from broader indices like CNX 100, CNX200 and CNX500. All this will collectively prevent Markets from a major slide. On the other hand, METALS and REALTY will see just select outperformance which will remain stock specific in nature. ENERGY is seen faltering on momentum. No major outperformance on week-on-week basis is expected from PSU Banks, Public Sector Enterprises, BANKNIFTY, METALS and PHARMA.

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, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)

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

Friday, April 27, 2018

MARKET OUTLOOK FOR FRIDAY,APR 27, 2018

MARKET OUTLOOK FOR FRIDAY,APR 27, 2018

The Markets ended the expiry day of the April derivative series on a positive note as the NIFTY ended gaining 47.25 points or 0.45%. The session remained absolutely quiet, contrary to expectations. Expiry led volatility was expected but the Markets spent the entire session in a 20-point sideways trajectory. It was only the last 30-minute of the trade that saw the spurt, majorly driven by short covering.

We expect the up move to spill over to Friday as well. With a caveat that we do not have any overnight weakness in the global markets to deal with, we are likely to see a modestly positive opening, though the 10650-mark will continue to pose immediate resistance to the Markets.

Friday is likely to see the levels of 10650 and 10735 acting as immediate resistance levels. Supports come in at 10575 and 10540 zones.

The Relative Strength Index – RSI stands at 63.8754. A bearish divergence is observed as while NIFTY has marked a fresh 14-period high, RSI did not. Daily MACD continues to remain bullish while trading above its signal line.

Pattern analysis of the Daily Charts shows the Markets accumulating in a narrow sideways trajectory after testing its important pattern area resistance. After more than 500-point up move from the immediate lows, the NIFTY is just remaining sideways after testing resistance and is showing no signs of any retracement.

A sideways movement after a strong pullback often translates into a base formation for further up move. Also, the new series is likely to start on much lighter note as well. Contrary to the short positions that were being piled up in the current month, long rollovers were witnessed in the next month. However, we still have to exercise some caution until the levels of 10650 is taken out with conviction. We reiterate to continue to utilize dips into making fresh select purchases. A cautiously positive outlook is advised for the day.

STOCKS TO WATCH:

Good technical set up is observed in stocks like ONGC, CGPOWER, HINDZINC, GREENPLY, JAIBHARAT MARUTI, ESCORTS, TD POWER SYSTEMS, NTPC, IIFL HOLDINGS and .