WEEKLY MARKET OUTLOOK FOR JUL 02 THRU JUL 06, 2018

WEEKLY MARKET OUTLOOK FOR JUL 02 THRU JUL 06, 2018

We had feared some technical damage in our previous Weekly Note if the NIFTY is not able to breach the 10820-10850 zones on the upside. After struggling all throughout the week before this, the NIFTY saw itself giving up to this resistance area. Even with the NIFTY ending on a strong note on the last trading day of the week, it has still ended the week with net loss of 107.55 points or 0.99%.

Though there is some minor structural damage on the Daily Charts, the Weekly Charts still see the NIFTY continuing to resist to the falling trend line; however, no break down on this longer term time frame chart is seen.

As we step into fresh week from Monday, the NIFTY still continues to remain in a critical condition, just not out of the woods. On the daily Charts, there is clear break down from the large symmetrical triangle. On the longer term Weekly Charts, it still continues to resist to the falling trend line drawn from the life time high.

Next week will continue to see the levels of 10830 and 10945 posing great resistance to the Markets. Supports come in at 10600 and 10480 zones.

The Weekly  RSI stands at 56.5632. RSI continues to remain neutral and shows no divergence against the price. The Weekly MACD still remains bullish while trading above its signal line. No significant formations were observed on Candles.

While having a look at pattern analysis, NIFTY continues to resist to the falling trend line that emerges from the high of 11170 and joins the subsequent lower tops. This makes evident that unless the NIFTY moves past 10800-mark, it will continue to resist to the falling trend line pattern resistance.

Overall, though Friday’s session saw sharp short covering led rally, it would important to see if this means failure of a negative breakdown from a formation or it is just a dead cat bounce. The coming week will remain equally crucial like the previous one. We recommend maintaining cautious view on the Markets and restrict purchases to specific stocks and s

ectors only. More relative stability is expected large caps and front line Markets. Broader markets performance might still continue to remain a concern.

 A study of Relative Rotation Graphs – shows that ENERGY pack has entered the Improving Quadrant and is likely to spruce up its relative performance coming week. With this, the PSU Banks have maintained its resilience against the broader markets. Apart from this, BANKNIFTY and FINANCIAL SERVICES pack remain very much in the Leading Quadrant while continuing to improve both on relative strength and momentum. They are likely to continue to lead the outperformance against the general markets along with Services sector. FMCG continues to lose momentum and strength along with CNX IT and this is likely to continue in the coming week. All broader Market Indices like CNX100, 200 and 500 along with NIFTY JR. and MIDCAP Universe have steadily continued to lose both relative momentum and strength. METAL, INFRA and MEDIA too are not expected to put up any eye-catching show.

Important Note: RRG™ charts show you the relative strength and momentum for a group of stocks. In the above Chart, they show relative performance as against NIFTY Index and should not be used directly as buy or sell signals.

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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