MARKET OUTLOOK FOR WEDNESDAY, MAR 21, 2018

MARKET OUTLOOK FOR WEDNESDAY, MAR 21, 2018

Despite ending below 200-DMA on the previous day, Tuesday’s trade saw a volatile attempt by the Indian Markets to keep itself afloat and avoid any serious breakdown. The benchmark Index NIFTY 50 saw itself in a capped range during the day oscillating back and forth while struggling to keep its head above the crucial 10040-mark. The Markets finally ended with net gains of 30.10 points or 0.30%.

As we approach Wednesday’s trade, we can expect technical pullback by the Markets. A modestly positive start is expected but in any case NIFTY will have to move past the 10166-mark to stay successfully afloat and avoid any major breakdown. 10166 is the 200-DMA. Given the oversold nature of the oscillators, even if the NIFTY does not immediately find its bottom, there are larger chances of a pullback than a outright breakdown from current levels.

The levels of 10166 and 10245 will act as immediate resistance for the Markets. Crucial supports come in at 10040 and 9980 zones.

The Relative Strength Index – RSI on the Daily Chart is 36.0100 and it remains neutral showing no divergences against the price. The Daily MACD is bearish while it trades below its signal line.

Pattern analysis shows that the NIFTY has continued to resist to the 200-DMA on the upside while attempting to pullback. It will have to move past 10166-mark at the to have a sustainable and serious pullback. Until this happens, NIFTY remains vulnerable to volatile oscillations with 10040 acting as its support.

Overall, NIFTY is not completely out of the woods as yet but it certainly remains oversold on some oscillators. This makes it likely that even if it remains in continuing downtrend, it gives some decent technical pullback. However, the moving past and closing above 10166 will be crucial for the NIFTY to avoid any major breakdown. We will recommend avoiding any major shorts at this juncture. Cash should be preserved and extremely select stock specific purchases may be made. Continuance of cautious outlook is advised until we see NIFTY moving past 10166 in a convincing manner.

STOCKS TO WATCH:

Resilient technical is seen on stocks like BHARTI INFRATEL, TATA STEEL, CG POWER, VEDANTA, TATA POWER, MERCATOR, ZEE ENTERTAINMENT, BEML, MARUTI, BHARAT FINANCIAL and GRASIM.

(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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