WEEKLY MARKET OUTLOOK FOR JULY 10 THRU JULY 14, 2017
In a Week that remained better-than-expected for the
Markets, the benchmark NIFTY50 ended with net gains of 144.90 points or 1.52%
on week-on-week basis. Though the Markets remain overbought on Weekly Charts,
we see the Markets remaining in a broad range. Though a fresh breakout is not
expected this week as it would be too soon and too fast, we certainly expect
the Markets to trade with a positive bias.
Next Week will see the Markets resisting at 9710 and 9780
zones. Supports will come in at 9500 and 9430 levels.
The Relative Strength Index – RSI on the Weekly Chart is
71.7787. Though it shows no divergence against the price, it stays in
overbought territory. The Daily MACD stays bullish while trading above its
signal line. However, it is sharply moving towards reporting a negative
crossover.
The pattern analysis on the Weekly Chart the Markets
consolidating in a narrow range after the up move that it saw from 8950-9000
mark as it achieved a breakout from there. We expect this consolidation to
continue and some area pattern to develop before Markets move up again.
Overall, we should not fail to understand that long the
period of consolidation, healthier it will be for the Markets. Such
consolidation would give Markets more impetus to head higher over coming week.
So for as the coming week is concerned, we strongly recommend that unless the
Markets breach the previous high of 9700-9710 mark, it should be approached
with caution and profits should be protected at higher levels.
A study of Relative Rotation Graphs – RRG very clearly show
that REALTY which led the relative outperformance over past 10 weeks is now
ready to take the back seat. REALTY will be seen losing momentum over coming
Week. FMCG will continue its stellar show in the coming Week. PHARMA, IT and
Metal Stocks will considerably improve their ground and will ready itself for
serious up ticks over coming week. We will see broader indices like NIFTY Next
50, MID50, NIFTY 100,etc losing momentum in the coming week.
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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