MARKET OUTLOOK FOR MONDAY,JUNE 04, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 04, 2018

In our previous Daily note, we had discussed about the possibilities of the NIFTY not seeing any runaway rally after the sharp short covering bounce that it witnessed in the expiry session on Thursday. Much on the expected lines, the Friday’s session saw the NIFTY opening modestly in the green but also saw the NIFTY spending the entire session in a falling trajectory. The Index ended the day posting a net loss of 39.95 points or 0.37%.

As we approach the new week, we expect Monday to see a modestly positive opening to the trade. However, we also expect that the NIFTY will not see any major directional moves on either side. It is likely to trade in a capped range with upsides finding resistance at higher levels.  Some amount of consolidation is now expected to creep in and persist for some time.

Monday is likely to see the levels of 10765 and 10790 playing out as resistance zone for the Markets. Supports come in at 10650 and 10605 zones.

The Relative Strength Index –RSI on the Daily Chart is 54.9419. RSI remains neutral and it shows no divergence against the price.  Daily MACD continues to remain bearish while trading below its signal line. No significant formations were observed on Candles.

If we go by pattern analysis, it shows that the NIFTY attempted to break out of the broad trading range that it has formed over past couple of months. However, post an attempted breakout, it is witnessing some throwback. If 10600-10630 zones do not lend any immediate pattern support, it may see some more weakness creep in.

Overall, it is seen that the NIFTY has taken support on its short term 20-DMA which is at 10665. Any breach below this level at close will again push the Markets into some more consolidation and minor corrective phase. Speaking purely on technical terms, there are no triggers apart from the Monetary Policy which is slated to come in later this week that will influence any sharp move in the Markets. We recommend remaining very much stock specific and chase the momentum on in much selective manner while keeping overall exposures at modest levels.

STOCKS TO WATCH:

Long positions were seen being added in stocks like ICICI BANK, TATA MOTRS, PFC, ASHOK LEYLAND, RELIANCE, HINDALCO, TVS MOTORS, EQUITAS, ENGINEERS INDIA, UJJIVAN, HDFC and LARSEN & TOUBRO.

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 
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

+91- 70164-32277  /  +91-98250-16331  
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com