MARKET OUTLOOK FOR THURSDAY, FEB 22, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 22, 2018

Despite getting a better than expect start to the trade, the Indian equity markets failed to capitalize on the positive opening on Wednesday. After opening higher, the NIFTY pared all of its opening gains and remained lackluster for the major part of the session. It was only the last hour of the trade that saw some minor upsides. The benchmark Index ended with modest gains of 37.05 points or 0.36%.

Thursday is likely to see a quiet but positive start to the trade. Also, we enter the expiry day of the current derivative series and we will see the session remain heavily dominated with rollovers. We also expect a volatile trade tomorrow as the expiry has coincided with the Markets attempting to find base at current levels.

The levels of 10465 and 10490 will act as immediate resistance levels for the Markets. Supports come in at 10310 and 10275 zones.

The Relative Strength Index – RSI on the Daily Chart is 38.0586 and it remains neutral. It is also seen taking a pattern support and is inching higher. The Daily MACD stays bearish but it has started to narrow its trajectory. No significant formations were observed on Candles.

While having a look at pattern analysis, it is encouraging to see the NIFTY has as of now successfully defended the support of 100-DMA at Close levels. Some minor slip below this crucial support was seen but NIFTY stayed within its filter as of now and defend this crucial support.

All in all, we expect this struggle of NIFTY to defend the support of 100-DMA to continue. Also, in the same breath, good amount of shorts exists in the system. We observe that if  the Markets do not breach its immediate supports, we may see short covering being triggered. We strongly recommend to avoid shorts as short trap may occur. There will be significant downsides only if the NIFTY ends below 10275-10300 zones but until then, liquidity should be preserved and all dips should be used in picking quality stocks. Cautious but positive outlook is advised for the day.

STOCKS TO WATCH:

Resilient technical setup is seen in stocks like SCHNEIDER ELECTRIC, RELIANCE, TECH MAHINDRA, FIRST SOURCE SOLUTIONS, AXIS BANK, JAIN IRRIGATION, DHFL, FUTURE CONSUMER, MIND TREE and TV18 BROADCAST.

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
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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