MARKET OUTLOOK FOR WEDNESDAY,JUNE 27, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 27, 2018

The Indian Equity Markets headed nowhere as the benchmark Index spent the entire session in a range bound trade. The Index oscillated in a narrow range and settled the day with nominal gains of 6.70 points or 0.06%.

In a way, NIFTY displayed great resilience to the overnight global weakness. However, it is important to note that it has continued to resist to the falling trend line and has not yet achieved any meaningful directional bias. It also continues to remain in a broad symmetrical triangle formation as evident from the Charts.

We can expect a stable opening on Wednesday but it is likely that either on Wednesday or in coming days, NIFTY is set to resolve the current pattern formation with a sharp move on either side.

We expect the levels of 10820 and 10850 to act as immediate resistance levels. Supports come in at 10740 and 10680 zones.

The Relative Strength Index – RSI on the Daily Chart is 53.3053. It remains neutral showing no divergence against the price. The Daily MACD is bearish as it trades below its signal line. Apart from a small white body that occurred, no significant formations were observed on Candles.

Going by pattern analysis, NIFTY still remains within a broad symmetrical triangle formation and is moving towards its apex. It has not achieved any directional breakout as of now and is treading near its 20-DMA. The resolution of this pattern with a sharp directional move on either side is imminent in coming days.

In absence of any breakout, we still need to approach the Markets with caution. It is a positive sign that despite global weakness, NIFTY has demonstrated internal strength by continuing to consolidate and not showing any draw downs. However, with expiry lurking around us and with NIFTY still struggling with a major pattern resistance, it would be prudent to stay with more liquidity and maintain light exposures while remaining highly stock specific in the approach to the Markets.

STOCKS TO WATCH:

Long positions were seen being built in stocks like BANK OF BARODA, ITC, ASHOK LEYLAND, NTPC, YES BANK, IDEA, ONGC, CG POWER, SUN PHARMA, NCC, BHARTI AIRTEL and HINDALCO.

(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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