MARKET OUTLOOK FOR THURSDAY,JUNE 07, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 07, 2018

Much on expected lines, the NIFTY continued with its short covering led up move and ended the day with a gain of 91.50 points or 0.86%. Though the session remained stable, some volatility was infused due to Markets reaction to RBI Monetary Policy review that came in the second half of the session.

Also as mentioned in our yesterday’s note, this remained largely a non-event apart from some volatile reactions. The RBI raised the Repo rate by 25 bps and the Reverse Repo rate to 6%.

As we approach Thursday, we expect a modestly positive start to the trade but also expect the session to remain largely range bound capped on both upper and lower sides.

Thursday will see the levels of 10725 and 10760 to act as immediate resistance to the Markets. Supports come in at 10620 and 10570 zones.

The Relative Strength Index – RSI on the Daily Chart is 53.8854 and it remains neutral showing no divergence against the price. Daily MACD stays bearish while trading above its signal line. Apart from a white body that appeared on Candles, no significant formations were observed.

The pattern analysis shows that the NIFTY has so far validated the support area of 50-DMA and 100-DMA which remain in very close vicinity of each other. In event of any ongoing consolidation, this zone is likely to provide support at Close levels.

Overall, we may see continued uptick in the Markets in the early trade on Thursday. However, with each up move, we need to cautiously guard positions as NIFTY remains vulnerable to profit taking at higher levels. There are no triggers to short the Markets and therefore, any downsides that the volatility may offer should be utilized to make select purchases. With no directional bias on either side and with all likelihood of a ranged trade on Thursday, cautious view is advised for the day

STOCKS TO WATCH:

Technically resilient setup is seen in stocks like GODREJ CONSUMER, UBL, HINDZINC, VEDL, ASHOK LEYLAND, TATA MOTORS,  IDFC BANK, SAIL, TATA STEEL, DHFL and VOLTAS.

(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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