MARKET OUTLOOK FOR WEDNESDAY,JUNE 20, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 20, 2018

Tuesday’s session saw the Indian Equity Markets remaining gripped in a downward trajectory as the benchmark Index NIFTY50 slipped further and ended the day losing 89.40 points or 0.83%. The Markets remained in falling trajectory throughout the session and at no point of time did it make any attempt to recover.

As we approach Wednesday, there are mild chances that the Markets attempts to stabilize as it currently rests on its short term 20-DMA. However, there are higher chances that we may see some amount of weakness persisting in the Markets. In anyway, no runaway technical pullback is expected from the Markets. The opening is expected to be tepid.

We are likely to see the levels of 10745 and 10820 acting as immediate resistance area for the Markets. Supports come in at 10690 and 10650 zones.

The Relative Strength Index –RSI on the Daily Chart is 50.2903 and it remains neutral showing no divergence against the price. The Daily MACD still remains bullish while trading above its signal line. However, it is seen narrowing its trajectory. On the Candles, a big black body occurred. This reinforces the credibility of the resistance area of the 10820-10850 zones.

Pattern analysis shows that NIFTY is currently forming a large symmetrical triangle formation as evident on the Daily Charts. The NIFTY is resisting to the falling trend line of this formation drawn from 11170 which joins the subsequent lower tops.

Overall, it is just that NIFTY has rested on its short term 20-DMA, we expect some stability to come in. However, with lack of any major trigger and with the present technical structure, we might continue to see tepid behavior from the Markets. The important support now come in the form of 50-DMA which remain in close vicinity at 10653. This is likely to act as important support at Close levels. Overall, in any case, we do not expect any runaway technical pullback to occur. We expect Markets to remain range bound and expect the session remaining highly stock specific. While keeping overall exposures at modest levels, cautious outlook is advised for the day.

STOCKS TO WATCH:

Short positions were seen being added in SOUTH BANK, ICICI BANK, BANK INDIA, ICICI BANK, ASHOK LEYLAND, RCOM, INDIA CEMENTS, SAIL, BANK OF BARODA, CG POWER, FEDERAL BANK and TATA STEEL.

(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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