WEEKLY MARKET OUTLOOK FOR JUN 04 THRU JUN 08, 2018

WEEKLY MARKET OUTLOOK FOR JUN 04 THRU JUN 08, 2018

 After closing on a flat note in the week before this week, the current week saw the Markets ending with minor gains. On a week-to-week basis, NIFTY ended this week gaining 91.05 points or 0.86%. In our previous Weekly note, we had mentioned about formation of a probable lower top. This formation still remains the resistance area for the Markets in the coming days.

As we step into the coming week, we face an important economic event of RBI Credit Policy slated to come out on June 06. Apart from this, we do not see any major triggers for the Markets and do not expect a run-away rally in the Markets in the coming week. The falling trading line that has emerged out of the formation of a lower top is likely to resist any significant up move that the Markets may attempt.

Coming week will see the levels of 10790 and 10865 playing out as immediate resistance area for the Markets. Supports come in lower at 10610 and 10515 zones. The range remains wider this week on either side.

The Weekly Relative Strength Index – RSI stands at 57.7511 and it remains neutral showing no divergence against the price.  Weekly MACD stays bullish while trading above its signal line. No significant observations were seen on Candles.

If we look at pattern analysis, after forming a lifetime high of 11171, the NIFTY has formed a lower top at 10930. This emergence of a lower top has resulted into formation of a falling trend line joining these two levels. In the coming week, this will pose resistance to the Markets in event of any attempted up move.

Overall, despite the likelihood that the NIFTY may not witness any runaway up move beyond a point, it still remains very much in the 28-month long upward rising channel. The coming week is likely to continue to remain extremely stock specific in nature. We recommend spotting smart buying opportunities that any corrective move may offer and at the same time, continue to protect profits at higher levels.

 A study of Relative Rotation Graphs – shows that the coming week will see Financial Services stocks continuing to relatively outperform the general Markets. They are likely to be accompanied by FMCG Stocks who still remain in the leading quadrant but are seen slowing down a bit. Apart from this, we expect PSU Banks and components of Bank NIFTY attempting to improve their relative momentum as well. Apart from this some isolated and sporadic out-performance are a expected from METALS, Public Sector Enterprises and Realty pack. We do not expect any significant out-performance from the broader Markets as all broader Indices like MIDCAPS, CNX100, CNX200 and CNX500 are seen deteriorating on the momentum front. Auto stocks too are not expected to put up any significant show on a weekly note.

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

MARKET OUTLOOK FOR FRIDAY,JUNE 01, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 01, 2018

The May derivative series ended on a robust note as the benchmark Index NIFTY50 saw a sharp surge in the second half. It ended the day gaining 121.80 points or 1.15%. In our previous note, we had mentioned about likely short covering in the second half of the trade as May had significant amount of short positions existing in the system. Thursday’s session traded much on the expect lines and it did witness a sharp surge on account of short covering. 

As we approach Friday, though we do expect a quiet to modestly positive start, the NIFTY has once again moved towards that situation wherein a consolidation or a mild retracement at higher levels should not surprise us. A modest up move cannot be ruled out on Friday but in the same breath, NIFTY may witness some corrective retracements from higher levels. 

Friday will see the levels of 10750 and 10795 will play out as immediate resistance area for the Markets. Supports come in at 10650 and 10600 zones.

The Relative Strength Index – RSI on the Daily Chart is 57.75 and it remains neutral showing no divergence against the price. It is seen marking a higher bottom and inch higher. Though Daily MACD is still bearish, it is on verge of reporting a positive crossover. 

Pattern analysis reveals a interesting picture. The NIFTY has validated the support of 50-DMA at Close levels and has move past 100-DMA as well. It halted at its short term 20-DMA but in Thursday’s session, it has not only moved past its short term 20-DMA but has moved past the multiple pattern resistance zones of 10600-10650 levels. 

Overall, for the immediate short term, we can fairly expect the NIFTY to continue with its up move and we expect NIFTY to test its upper band of 10860-10890 zones. However, this is not likely to happen without any minor corrective retracements. Though the NIFTY shall overcome this, the zones of 10860-10890 will still remain a formidable resistance on the long term charts. We recommend making select purchases and riding the momentum. However, we also recommend maintaining high levels of vigilance at higher levels. Each up move shall protecting existing profits more important in coming days. 

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