WEEKLY MARKET OUTLOOK FOR SEP 11 THRU SEP 15, 2017
Our previous Weekly Outlook mentioned all possibilities of
the NIFTY not racing towards its highs too soon and not showing any major
downsides as well. Very much in line with this analysis, the benchmark NIFTY50
spent the entire Week that has gone by trading in a very narrow and defined
range and not making any meaningful headway. It ended the Week with net loss of
39.60 points or 0.40% on a Weekly basis. We expect a subdued start to the Week
on Monday. We expect the coming week to remain range bound we will see NIFTY
struggling to scale fresh highs. Despite few sectors which are likely to
distinctly out-perform, slightest of the negative trigger will see the NIFTY
testing its previous supports.
The coming Week will continue to see the levels of 9990 and
10110 acting as immediate resistance levels, supports are expected to come in
at 9830 and 9750 levels.
The Relative Strength Index – RSI on the Weekly Chart is
65.4614 and it remains neutral showing no failure swings or any divergences
against the price. The Weekly MACD continues to remain bearish while trading
below its signal line and no divergences have been observed within the last
five periods. No significant formations are seen on Candles.
The pattern analysis show the Markets trading in the upper
range of the long 18-month channel that it has formed. Given the overall
structure of the Weekly Charts and the pattern, the NIFTY is currently seen in
a minor congestion area and showing some minor signs of exhaustion.
Overall, the coming week is also likely to see some
volatility remaining ingrained in it. The NIFTY, if seen on the Daily Charts,
is currently in the longest congestion period given the number of days it has
been trading in a narrow range. The levels of 9860-9820 remain very critical
zone for the Markets and any breach below this is likely to cause short term
disruption in the primary trend. However, as of now, the primary trend remains
intact. However, we would strongly recommend remaining extremely stock specific
as the coming Week is expected to remain dominated with select stock specific
performances.
A study of Relative Rotation Graphs – RRG show that the
coming week will see distinct out-performance from METAL pack continuing. It is
likely that the select stocks from NIFTY Junior (NIFTY Next 50), MIDCAP and
ENERGY pocket join the party in relative stock specific out performance. No
major improvement is likely from PHARMA, FMCG and BANKNIFTY which is likely to
remain range bound. PSUBANKS and MEDIA will continue to show improvement in
momentum in coming week. REALTY, IT, etc will continue to show relative
under-performance.
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:
CMT Association (Formerly Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Associate International Member:
Society of Technical Analysts, STA (UK)
+91-70164-32277 / +91-98250-16331
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