Saturday, March 25, 2017

MARKET TREND FOR FRIDAY, MARCH 24, 2017

MARKET TREND FOR FRIDAY, MARCH 24, 2017
In our previous note, we had mentioned that all we have witnessed is a “classical throwback” and in line with this analysis, the benchmark NIFTY50 arrested its downsides and ended the session yesterday with a decent gain of 55.85 points or 0.62%. Today, we expect a modestly positive start to the Markets and expect the up move to continue. Also, as of now, the zones of 8990-9020 have re-established themselves as immediate bottom. So long as the NIFTY trades above these levels, we will continue to see upward bias in the Markets. Today, though the movements may remain range bound, overall, the downsides will remain limited and upward bias will prevail.

The levels of 9125 and 9175 will act as immediate resistance levels for the Markets while the levels of 9045 and 8990 will act as immediate supports.

The Relative Strength Index – R SI on the Daily Chart is 65.5594 and remains neutral showing no divergences. The Daily MACD is bearish as it trades below its signal line. On the Candles, a small “Bullish Belthold” pattern has occurred. Thought this requires confirmation on the following day, it implies continuation of the upward move.

The NIFTY March futures have added 0.13% in Open Interest and this figure remains insignificant to affect the underlying sentiment.

The Pattern analysis reflects a classical throwback on the Daily Charts. The NIFTY broke out on the upside from the 9000-mark and after scaling fresh highs, it returned very near to the same place from where it gave an upward breakout. Such throwbacks are normal when a breakout is sharp and with a breakaway gap. The reversal of the move from the throwback area further indicates likely continuation of the original up move.

All and all, we are all likely to see the Markets trading with a positive tick. The movements overall will remain range bound and some more consolidation cannot be ruled out. The NIFTY may see itself oscillating in a capped range but the underlying sentiment will continue to remain buoyant and stable. Dips, if any, should be utilized to make selective purchases as sector-specific out performance will continue.

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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MARKET TREND FOR THURSDAY, MARCH 23, 2017

MARKET TREND FOR THURSDAY, MARCH 23, 2017
In line with global weakness, the Indian Equities markets also suffered a setback and ended the day with loss of 91.05 points or 1%. Technically speaking, this is a classical “throwback” that the Markets had after it had a gap formed on the upside post US Election results. This gap got filled in yesterday’s session and also a classical throwback occurred where the prices returns near to the levels from which it broke out as marked by a red circle. Today, on Thursday, we are all likely to see a modestly strong opening and a reversal happening again. NIFTY is likely to open positive and witness a breather from the weakness that it saw in the previous session. The levels of 9000-9010 will remain important pattern support to watch for.

The levels of 9075 and 9130 will act as immediate resistance levels for the day. The supports will come in at 9000 and 8970 levels.

The Relative Strength Index on the Daily Chart is 59.5264 and it just crossed below from a topping formation. RSI has set a fresh 14-period low which is bearish. RSI has also set a fresh 14-period low while the NIFTY has not and this has resulted into bearish divergence. 
The Daily MACD too has reported a negative crossover and it is now bearish trading below its signal line. On the Candles, a falling window occurred. This usually has bearish implications going ahead but it also requires a confirmation on the following day which we fill NIFTY shall survive while taking support in the 8970-9030 zones.

The NIFTY March futures has gone on to add yet another over 3.23 lakh shares or 1.25% in 
Open Interest and this shows continued addition of fresh shorts in the system.

The pattern analysis shows a classical throwback. A throwback occurs when the prices returns nears the same levels from which it broke out on the upside. This is quite normal if the breakout is very sharp and causes the price to be overbought which happened with NIFTY. Normally, this causes the prices to consolidate before moving up again.

All and all, there are few observations that suggest that the yesterday’s downside was nothing more than just a technical corrective throwback. First, this came with addition in Open Interest, further, the global markets are likely to trade relatively stable. The US 10-YR yield has come off its highs rapidly over previous two days which is likely to minimize the potential damage it could have caused. We very strongly recommend refraining from shorting the Markets. Liquidity should be preserved and

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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MARKET TREND FOR WEDNESDAY, MARCH 22, 2017

MARKET TREND FOR WEDNESDAY, MARCH 22, 2017
The Indian Equities saw classical consolidation on projected lines as the NIFTY ended the day on a flat note losing 5.35 points or 0.06%. Today on Wednesday, we expect the Markets to trade on similar lines. The opening is expected to be modestly negative and there are chances that we see some corrective activities in the first half. However, indicators continue to suggest that such corrective activities may remain in form of intraday oscillations and NIFTY continues to consolidate with limited downsides at Close.

The levels of 9155 and 9200 will act as immediate resistance levels while the supports will come in at 9085 and 9015 levels.

The Relative Strength Index – RSI on the Daily Chart stands at 71.5067 and it remains neutral showing no bullish or bearish divergence against the price. The Daily MACD continues to remain bullish while trading above its signal line. A formation similar to Spinning Top has occurred on Candles. This reflects caution and indecisiveness on part of the Market participants.

The NIFTY March futures saw further addition of 2.91 lakh shares or 1.14% in Open Interest. This addition of OI has occurred while the NIFTY pulled back from the lower levels of the day indication possible creation of fresh long positions in the Markets.

The pattern analysis of NIFTY clearly reflects some exhaustion on the Daily Charts. Post the breakout from the 9000-mark, the NIFTY has retraced a small portion of it and presently it continues to fiercely consolidate at Close levels. It is very much likely that it continues to consolidate in this manner and the indicators suggest very limited downsides and suggest the present trend to be intact.

All and all, in all possibilities, we will see a mildly negative opening but even if this happens, we will continue to see resilience at Close levels. In all probability, the corrective activities will persist but the oscillations will remain defined in a range and we may not see any major selloff as yet. In fact, there are strong indications that such dips will get bought into on very selective basis. Positive caution is advised for today.

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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Tuesday, March 21, 2017

MARKET TREND FOR TUESDAY, MARCH 21, 2017

MARKET TREND FOR TUESDAY, MARCH 21, 2017
The Indian Equities traded much on expected lines as the Markets took a breather and showed some retracement from its highs. It ended with a modest loss of 33.20 points or 0.36% in a range bound session after coming off from the opening intraday highs. We expect the Markets on Tuesday to open on a flat note and remain range bound with an upward bias. We expect range bound consolidation with bullish intent. We also expect some volatility to creep in but overall downsides will continue to remain limited.

Tuesday’s session will see 9150 and 9190 acting as the immediate resistance levels while the supports will come in at 9085 and 9045 levels.

The Relative Strength Index – RSI on the Daily Chart is 72.3006 and it remains neutral showing no bullish or bearish divergences against the price or any failure swings. The Daily MACD stays bullish while trading above its signal line. No significant formations are observed on Candles.

On the derivative front, the NIFTY March futures have added over 6.81 lakh shares or 2.74% in Open Interest.

The pattern analysis shows some likely throwback after a spectacular and strong breakout. The NIFTY has successfully achieved and confirmed a breakout from its major Double Top pattern resistance. Post rise of over 200-odd points from the point of breakout, it is taking some breather and witnessing some healthy consolidation. This would be positive for the Markets and will lend further strength that it will require to move higher in coming days.

All and all, it is also important to note that some fresh shorts are also seen being built in to the system. The strong technical indicators and the creation of shorts will continue to keep the downsides limited. We reiterate to stick to the policy of selective stock picking and continue to maintain positive outlook on the Markets. The overall exposures should be kept highly selective while avoiding creation of any shorts in the Markets as the undercurrent continues to remain strong with an upward bias.

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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MARKET TREND FOR MONDAY, MARCH 20, 2017

MARKET TREND FOR MONDAY, MARCH 20, 2017
Putting buoyancy on display, the Indian Equity markets showed no signs of correction and ended on Friday on a flat note gaining 6.35 points or 0.07%. On Monday, we expect a subdued opening in the Markets and expect some consolidation to set in. The NIFTY has not shown any correction as of now at Close levels but in Friday’s session, it has certainly shown some signs of fatigue and therefore, there are all chances that we see NIFTY50 taking a breather and some amount of healthy consolidation sets in.

The levels of 9175 and 9220 will act as resistance levels while supports will come in at 9104 and 9061.

The Relative Strength Index – RSI on the Daily Chart is 77.2426 and it has reported a fresh 14-period high which is bullish. However, it trades in overbought territory. The Daily MACD has not reported a positive crossover and it is now bullish while trading above its signal line.

On the derivative front, the NIFTY March futures have shed over 11.57 lakh shares or 4.44% in Open Interest. This signifies some profit taking at higher levels and also indications potential consolidation at current levels in the Markets.

Coming to pattern analysis, the NIFTY achieved a clear breakout above the 9000-mark and has went on to confirm this breakout as well. The breakout occurred from a major Double Top formation and therefore the levels that it breached, i.e. the 9000-mark has now become a important pattern support for the Markets. In event of any consolidation or a range bound corrective activity, this level of 9000-mark will remain critical to watch out for.

All and all, some signs of fatigue and exhaustion at 9200-levels in the NIFTY are apparent and evident. However, the lead indicators continue to show any buoyant intent. If we take a judicious view of all this, there are all chances that we witness some corrective activity in the Markets. Importantly, given the strong undercurrent, such corrective activity is likely to remain in form of range bound consolidation and very limited downsides. The broader Markets continue to remain supportive and individual stock specific and selective approach will hold the importance in coming sessions.

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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MARKET TREND FOR FRIDAY, MARCH 17, 2017

MARKET TREND FOR FRIDAY, MARCH 17, 2017
Strong uptrend continued in the Indian Equities as the benchmark NIFTY50 opened higher and spent the entire session maintaining the gains while ending the day with net gains of 68.90 points or 0.76%. Speaking purely on the technical grounds, there are bright chances that we see a modestly positive opening and NIFTY continues with its up move marking fresh highs. At this juncture, it is very much evident that the global liquidity is fuelling the Markets and under such conditions it is normal for the Markets to trade in overbought territory for some time but on the Daily Charts the lead indicators look bit overstretched.  At the same time, the NIFTY rests at important pattern resistance on the Weekly Charts. Given this, there is no doubt that the up moves in the NIFTY will continue but at the same time, we need to exercise much higher level of caution going ahead. It would be imperative for the Markets to consolidate and then move higher again. General buoyancy is very much likely to remain intact.

For today, the levels of 9195 and 9265 are likely resistance levels for the Markets going ahead. The supports appear much lower at 9105 and 9020 levels.

The Relative Strength Index—RSI on the Daily Chart is 76.9629 and it has reached its highest value in last 14-periods which is bullish. However, it continues to trade in overbought territory.

The NIFTY March futures shows further addition of over 7.63 lakh shares or 3.02% in Open Interest. This clearly presents the buoyant picture and evidently displays underlying buoyancy in the Markets.

Coming to pattern analysis, the NIFTY has achieved a clear breakout from its major pattern area resistance levels. This breakout has been achieved with a breakaway gap. This occurring with high volumes shows the strength of the breakout. Further strength in the Markets is displayed by the fact that the NIFTY is not giving up gains and oscillates in a capped range instead of any major corrective action.

Though we disregard the overbought structure of the Markets, we need to understand that being “overbought” does not mean weakness. It is, in fact a clear evidence and result of the strength. It simply means that the up move may get halted at some time and the NIFTY then consolidates in a defined range only to move higher. At this juncture, we categorically advice to refrain from creating shorts even at higher levels as the upward momentum remains absolutely intact. Barring some capped and range bound consolidation which might happen at later stage, such activity should be used to make sectoral purchases. Effective sector rotation will hold the key for future gains for the market participants.

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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MARKET TREND FOR THURSDAY, MARCH 16, 2017

MARKET TREND FOR THURSDAY, MARCH 16, 2017
Indian equities remain thoroughly range bound ahead of Fed outcome as it oscillated in a very narrow range ended up closing flat with minor loss of 2.20 points or 0.02%. In a way, this exhibited strength once again as after a robust up move on the previous day, the benchmark NIFTY50 did not give any corrective move and instead consolidated in a flat range. Today, despite the outcome of the Fed, we are likely to see a modestly positive opening and with very limited downsides, NIFTY is likely to continue to consolidate. The FII inflows have been heavily chasing the Indian Equities and given some chances of modest corrective activities, it is likely to continue to do so. Presently, the NIFTY had nearly discounted the imminent interest rate hike and baring some range bound oscillations and some throw back after a breakaway gap, NIFTY will continue to gather strength to move higher.

For today, the levels of 9125 and 9170 will act as immediate resistance levels while supports come in at 9035 and 8975.

The Relative Strength Index on the Daily Chart is 73.7075 and it remains neutral showing no bullish or bearish divergence or any failure swing. However, it continues to trade in overbought territory. The Daily MACD is bearish as it continues to trade below its signal line. A Spinning Top on the Candle portrays caution on indecisiveness in the Markets.

The NIFTY March futures have shed over added 90,375 shares or 0.36% in Open Interest. This OI figure has remained unchanged and hence maintains the bullish undertone build over the previous sessions and shows no change in underlying sentiment.

While having a look at pattern analysis, after achieving a breakaway gap from the Double Top resistance area on the Daily Charts, the NIFTY has maintained those levels and this certainly displays strength in the underlying sentiments. The NIFTY has chose to consolidate in a capped range and it did not correct even after the previous day’s robust gains. Though this displays strength, we cannot discount the fact that it trades in overbought territory.

The F&O data show NIFTY is all likely to continue with its uptrend. This reading is also supported by overall pattern analysis and the volumes with which the breakout has occurred. However, we cannot discount the fact that the NIFTY currently trades overbought. Given the present circumstance, even with the strong undercurrent some range bound consolidation is expected to continue and minor throwbacks cannot be ruled out. Overall, while avoiding shorts at higher levels cash preservation and protection of profits at higher levels is advised.

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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MARKET OUTLOOK FOR WEDNESDAY, MARCH 15, 2017

MARKET OUTLOOK FOR WEDNESDAY, MARCH 15, 2017

In line with the broad-based expectations, the NIFTY achieved a comprehensive breakout today while it ended the day with a robust gain of 152.45 points or 1.71%. Very much on expected line, the benchmark NIFTY50 saw a gap up opening and spent the entire session trading absolutely in sideways trajectory while ending the day near its opening levels. There are several factors that we now need to take into account. NIFTY has given a breakout and today, we expect a positive opening and therefore the uptrend to continue. On the other hand, though there is a breakaway gap with much higher volumes confirming the bullish continuation, the NIFTY is once again over-bought on the Daily Charts and therefore some profit taking at higher levels in form of ranged consolidation can also be expected. This increases the chances of some amount of throw back as well while keeping the overall up trend intact. Also, the near-imminent hike the US Interest Rates will also have its faint shadow on the Markets though NIFTY is all set to put up a resilient face against this and has nearly discounted the impending hike.

For today, the levels of 9145 and 9220 will act as immediate resistance levels for the Markets. The supports come in at 9060 and 8985 levels.

The Relative Strength Index – RSI on the Daily Chart is 74.0176 and it now trades in overbought territory. The NIFTY has set a fresh 14-day high while RSI has not and this has caused Bearish Divergence on the Daily Charts. The Daily MACD is still yet to report any positive crossover and is currently bearish trading below its signal line. On the Candles, a very significant formation of A Rising Window has occurred. This is a gap and with this occurring with heavy volumes, it may cause the upward  trend to continue.

The NIFTY March futures have added over 18.43 lakh shares or 7.89% in Open Interest. This too is a strong indicator of continuing buoyant uptrend in NIFTY in coming days.

Coming to pattern analysis, the NIFTY tested its all important Double Top resistance previous month and since then created a important congestion area while continuing to see range-bound consolidation. It has reported a clear breakaway gap on the upside and this clearly implies the upward momentum to continue.  The NIFTY closed above the upper Bollinger Band by over 12.20% with the prices breaking the upper band and confirmed upside breakout is possible.

All and all, the visual inspection of the patterns on the Charts, a clear breakaway gap on the upside and the F&O data all collectively point towards continuation of the uptrend in coming days. However, the only factor that would raise caution is the nearly-discounted US Fed decision that is coming up later tonight and the overbought nature of the Markets. This may cause some throw-back to occur on the Daily Charts. Apart from this, sectoral and stock-specific rotation will remain visible. While guarding profits at higher levels vigilantly, positive outlook is advised for today.

 (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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