WEEKLY MARKET OUTLOOK FOR APRIL 24 THRU APRIL 28, 2017
Our previous Weekly note
mentioned the benchmark NIFTY50 to head nowhere and remain in a broad range. In
line with the analysis, the NIFTY50 ended the week flat with modest loss of
31.40 points or 0.34% on weekly basis. We had also expected REALTY sector to handsomely out perform. The CNX REALTY Index
ended the week with 10% weekly gains. In the coming week, we continue to expect
the NIFTY50 to consolidate in a broad range and also expect the 8970-9000 zone
to act as a very crucial and strong support.
The levels of 9185 and 9270
will act as resistance over coming week. The supports are expected in the zones
of 9065 and 8970 levels.
The Relative Strength Index
on the Weekly Chart is 65.4629 and it remains neutral showing no divergences on
either side. The Weekly MACD stays bullish while trading above its signal line.
Small candle with a spinning top – a small real body—dipicts indecisiveness on
part of participants.
The pattern analysis show
deliberation on part of NIFTY post its breakout from 8970-9000 zones. Post
breaking out from those levels, the overbought nature of the Markets at that
time did now allow for a runaway rise. Since then, the NIFTY has been
consolidating on lower-than-average volumes. However, the breakout above the
zones of 8970-9000 mark remain absolutely intact and these levels will act as a
very strong support in case of the throwback happening.
Overall, we will continue to
see the Markets showing tentative mood over coming days. We might see lack of
explicit triggers and lack of conviction due to some portion of global uncertainties,
but we reiterate that the primary trend remains intact. We advice investors to
continue to utilize this classic consolidation period to rotate sectors
effectively and pick quality stocks.
A study of Relative Rotation Graphs – RRG show relative
outperformance from REALTY and select ENERGY stocks is likely to continue. In
any upward swings in NIFTY, we will see participation coming from MIDCAP
universe. SMALL CAP universe will also host pockets of outperformance. We will
see PHARMA attempting to consolidate its relative outperformance. No
significant outperformance will be expected from AUTO and PSUBANKS. METALS will
continue to lag while BANKNIFTY and NIFTYJR will see some slowing down in
momentum. Select Financial Services stocks are expected to relatively
outperform.
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, is
Consultant Technical Analyst at Gemstone Equity Research & Advisory
Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
+91-98250-16331
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