MARKET OUTLOOK FOR MONDAY,APR 30, 2018

MARKET OUTLOOK FOR MONDAY,APR 30, 2018

Indian Equity Markets followed up positive closing of the expiry day on Friday. The Markets saw a gap up opening with a renewed vigor, sustained it all throughout the day and the NIFTY ended the day with gains of 74.50 points or 0.70%. We enter into a truncated week with Tuesday being a trading holiday. Barring some more consolidation, we expect this up move to spill over to coming week as well.

Though we see some possibilities once again of consolidation happening at higher levels, we expect a quiet to modestly positive start to the trade on Monday. Markets are likely to see this expansion happening until its next logical targets of 10750-10800 zones. However, this is less likely to happen without any intermittent consolidation spells.

Monday will see the levels of 10730 and 10765 working out as immediate resistance levels for the Markets. Supports exist at 10660 and 10610 zones.

The Relative Strength Index – RSI on the Daily Chart is 67.7660. RSI has marked a fresh 14-period high which is bullish. It remains neutral and shows no divergence against the price. The Daily MACD remains bullish trading above its signal line. On the Candles, a rising window occurred. This is essentially a gap and usually sees a continuation of up move.

Pattern analysis shows that after resisting to a important pattern resistance area for couple of days, the NIFTY has attempted to break out of the rectangle formation. This has happened as a breakaway gap and we are all likely to see continuation of this up move.

Broadly speaking, given the current set up, we might see this breakout resulting into a short phase of fresh up move, we also cannot discount the possibility of small throw backs occurring. Traders and Investors are required to mitigate these risks of throwbacks happening in this otherwise bullish environment. These can be done with choosing stocks very selectively, rotating sectors and remaining vigilant at higher levels. Overall, positive outlook is advised for the day. 

STOCKS TO WATCH:

Long positions were seen being added in stocks like FEDERAL BANK, AXIS BANK, BEL, EQUITAS, TV18BROADCAST, DABUR, JINDAL STEEL, DHFL, KOTAL BANK, RELIANCE, TATA POWER and HINDZINC.

(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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