WEEKLY MARKET OUTLOOK FOR JAN 01 THRU JAN 05, 2018
After attempting a breakout from the 10490-zone and
suffering a throwback later, the benchmark NIFTY50 ended the Year on a positive
note on Friday. However, the Weekly gains remain modest with the Index gaining
37.70 points or 0.36% on Weekly basis. The Markets witnessed lot of oscillation
in a capped range and has attempted to move out again from the stiff resistance
area. While beginning a New Year and a new week on Monday, we are likely to see
the Markets ushering in the New Year on a positive note. There are chances that
we see a positive opening and see the Markets positively consolidating with a
upward bias. If the Markets inch higher in coming week, it may test the
24-month long rising trend line going ahead.
The levels of 10590 and 10675 will play out as immediate
resistance area for the Markets. Supports come in at 10410 and 10350.
The Relative Strength Index – RSI on the Weekly Charts is
65.6170. A Bearish Divergence persists on the Weekly RSI as the NIFTY has set a
fresh 14-period high while RSI has not done so. The Weekly MACD stays bearish
while trading below its signal line. A Spinning Top has occurred on the Candles
portrays the indecisive and tentative mood of the Market participants.
The pattern analysis reveals that in event of the Markets attempting
an up move, there are chances that the Markets face resistance at the 24-month
old rising trend line as evident from the Charts. The way there are
possibilities that the Markets may inch higher, there are equal possibilities
that the Markets may face very stiff resistance in that area at higher levels.
Overall, the Week is likely to start on a quiet to mildly
positive note and the NIFTY may attempt to inch higher and attempt to confirm
the breakout again after suffering a throwback once. We reiterate to maintain a
stock specific view as pockets of selective performance is likely to dominate
the Market action. While avoiding shorts completely, it is still advised to
protect profits vigilantly at higher levels while continuing to make select
purchases.
A study of Relative Rotation Graphs – RRG show AUTO pack has
significantly gained relative strength and momentum and is likely to relatively
out-perform. The MIDCAP, MEDIA and PSU Banks along with NIFTY Next 50 will also
join this relatively out-performing league of Indices. METAL and PHARMA are
evidently seen losing momentum on Weekly basis and the Index overall may not
perform much despite stock specific performances. ENERGY too is seen losing
sheen as compared to other sectors.
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 Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts, STA (UK)
+91-70164-32277 / +91-98250-16331
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