WEEKLY MARKET OUTLOOK FOR JAN 08 THRU JAN 12, 2018
The week that passed went off better for the Indian Equity
Markets as the benchmark NIFTY50 recovered bulk of its losses in the second
half of the week. With the positive ending of Friday’s session, the NIFTY ended
the Week with a nominal gain of 28.15 points or 0.27%. The NIFTY has managed to
move past and stay afloat the 10490-mark but it is yet to clear the resistance
zone of 10490-10535 comprehensively. While we begin a new week from Monday, we
are all likely to see the NIFTY trying to extend its gains. However, we also do
not expect any major runaway rally and expect the NIFTY to find resistance
around 10650-mark.
The coming week will see the levels of 10650 and 10690
acting as immediate resistance for the Markets. Supports come in at 10490 and
10375 zones.
The Relative Strength Index – RSI on the Daily Chart is
66.2384. It continues to show Bearish Divergence as the NIFTY has marked a
fresh 14-period high while the RSI has not done so. The Weekly MACD has shown a
positive crossover. It is now bullish while trading above its signal line. On
the Candles, a Hanging Man emerged. Since it has come after a up move, it may
cause some rally to pause for a while in between.
The pattern analysis shows that the NIFTY has managed to
stay afloat above its critical support levels. However, it also shows that in
event of continuation of up move, it may find serious resistance once again
near the 24-month old rising trend line which falls in the area of 10650-10675
area as of end of the previous week. It may so happen that the NIFTY many not
see any significant decline in event of any consolidation but also may not see
any one-way up move beyond the 10675-mark. The session is also likely to remain
highly stock specific and will continue to see certain pockets out rightly out-performing
the Markets. We recommend avoiding shorts as the structural up trend remains
intact. Select purchases may be made and profits be protected all through-out
next week at higher levels.
A study of Relative Rotation Graphs – RRG that PSUBANK has
significantly lost momentum on a Weekly note. It is likely to continue to
consolidate in the coming week as well. MEDIA, REALTY, may relatively
out-perform along with select pocket of Small Cap universe. Broader Indices
like MIDCAP and NIFTY Next 50 may also perform better. AUTO, INFRA and FMCG
will continue to see positive consolidation with select out-performance. PHARMA
are likely to continue to relatively under-perform the general markets along
with Energy pack. IT also may not see any significant relative out-performance
either.
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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