MARKET OUTLOOK FOR TUESDAY, MAR 13, 2018

MARKET OUTLOOK FOR TUESDAY, MAR 13, 2018

Much on the expected lines, the Indian Equity Markets saw a very strong relief rally today as the benchmark Index NIFTY opened above its critical resistance area of 10275-10300 and moved up further. In Monday’s trade, NIFTY ended with strong gains of 194.55 points or 1.90%. The rally remained across the board with FMCG leading the rally. However, PSU Banks grossly under-performed while REALTY and MidCaps remained relatively subdued.

Today’s up move has technical significance in many ways. It has not only sent NIFTY back in to the trading range but has also confirmed and validated the 200-DMA as a sacrosanct support for the immediate short term. Going into trade on Tuesday, the NIFTY shall encounter its 100-DMA which stands at 10454.41. It further has resistance at 10520 levels. Supports exist at 10380 and 10345 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.0203 and it continues to remain neutral showing no divergence to the price. The Daily MACD is still bearish but it is seen sharply narrowing its trajectory. If the pullback sustains and the NIFTY moves on, it is likely to report a positive crossover in coming days. A big white candle on the Candles Chart signifies the credibility of the support area of the 10275-10300 area.

The pattern analysis shows that the NIFTY is back inside the trading zone which is created with the formation of a rectangle after the most recent decline. Though there was a minor breach, but the downside was protected by the 200-DMA after which the NIFTY saw a strong pullback.

Overall, it is still important to note that the relief rally that was seen on Monday still remained more due to short covering. It is extremely essential that for the Markets to move on further, this will need to be replaced with short covering. It is likely that after a short deliberation by NIFTY around the 100-DMA, the rally is likely to continue but might see some intermittent jerks while it deals with its 100-DMA. Continuance of positive outlook is advised for the day.

STOCKS TO WATCH:

Technically resilient setup is observed in stocks like BHARTI AIRTEL, INFRATEL, JINDAL STEEL and POWER, NCC, DHFL, RPOWER,  CGPOWER, HINDUSTAN ZINC, VEDANTA, TATA GLOBAL, TECH MAHINDRA and ADANI PORTS.

(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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