WEEKLY MARKET OUTLOOK FOR JUNE 26 THRU JUN 30, 2017
Despite remaining overbought, the benchmark NIFTY50 put up a
resilient performance as the NIFTY ended flat on week-on-week basis ending just
13.10 points or 0.14%. Some minor correction was seen during the week but
Weekly Charts still remain overbought. We have a extended week-end, and
therefore a shortened expiry week ahead. Overall, the Markets are likely to
remain uneventful and are likely to trade with a corrective bias. We will also
see some volatility creeping in as well overcoming days.
The levels of 9660 and 9710 will continue to act as critical
resistance levels in the coming week. Supports come in at 9550 and 9475 levels.
The Relative Strength Index – RSI on the Weekly Chart is
71.2819. Though they remain neutral showing no divergence against the price,
they still continue to trade moderately overbought. The Weekly MACD is still
bullish trading above its signal line. However, it is moving towards reporting
negative crossover.
The pattern analysis shows no signs of any significant
downtrend of formation of any immediate top on Weekly Charts. The breakout
achieved from 8900-8950 levels continue to remain valid though some signs of
short term tiredness are seen.
Overall, the oscillators on the Daily Charts have
significantly corrected but they still remain moderately overbought on Weekly
Charts. This may cause the Markets to remain under corrective action for some
more time. In the coming week, adopting stock specific approach with high
degree of caution along with preservation of cash is advised.
A study of Relative Rotation Graphs – RRG shows that all
major broad sectors such as CNX100, 200, 500, NIFTYJR, PSUBANKS, ENERGY, INFRA,
MEDIA, CNXMID, etc are distinctly weakening. REALTY is struggling to relatively
outperform the Markets but is losing momentum as well. In the coming week, we
will see IT and METAL stocks continuing to consolidate their performance may
attempt to strengthen themselves. Relative out-performance will be seen from
select pocket of AUTO, Financial Services and FMCG stocks and they are expected
to outperform the benchmark.
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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