MARKET OUTLOOK FOR MONDAY, FEB 26, 2018

MARKET OUTLOOK FOR MONDAY, FEB 26, 2018

In our Friday’s note, we had mentioned that NIFTY has been struggling to find base as current levels and longer it remains around its 100-DMA, higher would be the chances that it moves past that level. The Friday’s session saw the benchmark Index hovering around 100-DMA and then the rest of the session saw the NIFTY steadily inching higher. The session saw NIFTY ending near its immediate support area of 10480-10500 zones, gaining 108.35 points or 1.04%.

Going in to trade on Monday, we expect this follow through up move to happen. We are likely to see the Markets opening on a positive note and might attempt to move past the 10480-10500 zones. The behavior of the Markets vis-à-vis the 10500-mark will be important. The levels of 10500 followed by 10615 are likely to act as immediate resistance area for the Markets.

The Relative Strength Index – RSI on the Daily Chart is 44.8467 and it has marked a fresh 14-period high which is bullish. The RSI also shows Bullish Divergence against the price. Though the Daily MACD remains bearish, it is seen sharply narrowing its trajectory and moving towards positive crossover in coming days. A white body occurred on the Candles and this holds significance as it has emerged near the important support area of 100-DMA.

While having a look at pattern analysis, it seems that the NIFTY has formed a base around current levels and going ahead in the immediate short term, the zones of 10276-10310 will hold out as strong support area for the Markets. Also important to note here is that the NIFTY has defended the 100-DMA levels at Close.

All in all, we expect a modestly positive start to the trade. Sooner the Markets move past the 10500-mark and stay above it higher will be the chances that it will see itself inching higher. We strongly recommend traders to strictly avoid attempts to short the Markets at higher levels as it has confirmed the formation of a base for the immediate short term. We will now see sectoral out-performance happening and will see select picking of stocks with each available opportunity. Global scenario remains favorable to this reading as well. Positive outlook is advised for the day.

STOCKS TO WATCH:

Resilient technical set up is seen in stocks like JP ASSOCIATES, JAYPEE INFRA, SUZLON, TATA STEEL, JINDAL STEEL, NHPC, ASHOK LEYLAND, BEL, MOTHERSON SUMI and ADANI POWER.

(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 known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK 
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