MARKET OUTLOOK FOR TUESDAY, MAR 27, 2018

MARKET OUTLOOK FOR TUESDAY, MAR 27, 2018

In our previous note, we had strongly expected an imminent technical pullback though 200-DMA still was expected to act as immediate resistance for the Markets. While trading on these expected lines, the Indian Equities gave a very smart and strong pullback and ended the day with NIFTY gaining 132.60 points or 1.33%. Though the pullback remained technical in nature, it has certainly marked a fierce attempt by the Markets to reverse its corrective actions.

Going into trade on Tuesday, we still expect the levels of 200-DMA which stand at 10175 to act as immediate resistance. This level also is a pattern resistance area. Further, the levels of 10230 will resist the up move. On the lower side, the levels of 10090 and 10040 are expected to provide supports.

The Relative Strength Index – RSI on the Daily Chart is 40.6887 and it is seen neutral against the price not showing any divergence. RSI is also seen taking a pattern support and inching higher. The Daily MACD still stays bearish while trading below its signal line. A Big White Candle emerged. This emerging near the oversold area and support levels further add to the credibility of its likely effect.

While having a look at pattern analysis, Monday’s session remains a significant one technically. With the Markets crawling back above the 10040-mark, it has thwarted a major breach of a 27-month long upward rising channel on the week charts.

Overall, there are high chances that the pullback that we saw gets extended on Tuesday. However, this up move might get a pause near the 200-DMA which stand at 10175. This also is a important pattern resistance area. There are chances that we see the Markets consolidating a bit around these levels. We also enter the penultimate day of the expiry and the rollover centric activities may keep the Markets volatile. We advice approaching Markets with positive caution and utilize corrective moves to make select purchases.

STOCKS TO WATCH:

Fresh long positions were seen being added in counters like SUZLON, ITC, RELIANCE, VEDANTA, CGPOWER, STATE BANK, IDEA, AXIS BANK, TV18 Broadcast, DHFL, HINDALCO, ASHOK LEYLAND and EQUITAS.

(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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