MARKET OUTLOOK FOR MONDAY,MAY 28, 2018

MARKET OUTLOOK FOR MONDAY,MAY 28, 2018

Indian Equity Markets continued its upsurge for the second day in a row on Friday as the NIFTY advanced its gains and ended the day gaining 91.30 points or 0.87%. Though select buying was evident in some stock specific moves, bulk of the up move has come from short covering in the Markets. What was technically important was that the NIFTY has validated 50-DMA as its support at Close and also it has moved past and closed above the 100-DMA level which now stands at 10539.

We enter the expiry week of the current derivative series. We expect a quiet opening to the trade on Monday and expect NIFTY to advance to the short term 20-DMA which stand at 10668 and also expect NIFTY to encounter multiple pattern resistances there.

Monday will see the levels of 10660 and 10695 acting as immediate resistance levels for the Markets. Supports come in at 10540 and 10480 zones.

The Relative Strength Index – RSI on the Daily Chart is 50.6063 and it remains neutral showing no divergence against the price. The Daily MACD stays bearish while it trades below its signal line. However, it is seen narrowing its trajectory. Apart from a white body that occurred, no significant formations were observed on Candles.

Pattern analysis of NIFTY reveals that the Index is within striking distance of its short term 20-DMA which also happen to be its important pattern resistance area for the Markets. There are chances that the Markets may stall its up move there and see some consolidation happening in a narrow range.

Overall, with quiet opening to the trade expected on Monday, we expect the session to remain much range bound in nature. We expect some minor gains in the Markets in general but also expect the up move to get stalled for a short while near the short term 20-DMA. In event of any minor corrective move, the 100-DMA levels may act as support at Close levels. We recommend refraining from shorts and continue to make modest stock specific purchases.  A positive, but cautious view is advised for the day.

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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