MARKET OUTLOOK FOR WEDNESDAY,MAY 23, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 23, 2018

The Indian Equity Markets ended its 5-day losing streak and end the day with gains on Tuesday. The gains remained modest as the NIFTY closed with a gain of 20 points or 0.19%. As mentioned in our previous note, the NIFTY continued to resist to the 100-DMA mark of 10538 for the entire day and also ended the day while resisting to this level. NIFTY did achieved some stability on the analyzed lines.

Wednesday’s session is likely to remain on similar lines. We expect a quiet to modestly positive start to the trade. At the same time, the levels of 10538 which is the 100-DMA of the NIFTY will continue to remain a critical level to watch for the immediate short term. It will remain critically important for the Markets to open and sustain above 10538 to attempt a pullback.

Wednesday will see the levels of 10550 and 10615 acting as immediate resistance area for the Markets. Supports come in at 10510 and 10460 zones.

The Relative Strength Index – RSI on the Daily Chart is 43.6255 and it remains neutral showing no divergences against the price. The Daily MACD stays bearish while trading below its signal line.

If we look at pattern analysis, the 50-DMA still trades below the 100-DMA mark. This means that the NIFTY is presently under very short term sideways movement and has lost upward momentum over past couple of week. The zone of 10460-10538 is likely to remain a extremely important support zone over coming days.

Overall, NIFTY appears oversold on some of the oscillators. Further, after five days of ending with losses, NIFTY has attempted to stabilize on expected lines. Also, some F&O data also suggest some likely technical pullback happening. We also expect some continuation of short covering in the broader markets as well while quality stocks will continue to see modest purchases being made. We recommend a cautiously positive view on the Markets while continuing to keep overall exposures into check.

STOCKS TO WATCH:

Shorts covering was seen in stocks like JSWSTEEL, IDFC BANK, ASHOK LEYLAND, NCC, TV18 BROADCAST, TATA MOTORS, SYNDICATE BANK, FEDERAL BANK, DISHTV, PTC, ICICI PRULIFE, NHPC and TATA GLOBAL.

(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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