Gemstone Equity Research & Advisory Services: 4/1/18

Saturday, April 7, 2018

WEEKLY MARKET OUTLOOK FOR APR 09 THRU APR 13, 2018

WEEKLY MARKET OUTLOOK FOR APR 09 THRU APR 13, 2018

The Indian Equities had a better week after a long time as the Markets saw weekly gains coming in. The NIFTY ended the week with a net gain of 217.90 points or 2.15% on a weekly note. The week that has gone by held and validated two technically significant events.

In our previous weekly note, we had expected and up move since the critically important level of 10040 was defended and we had expected the Markets to move past the 200-DMA and Close above that. With both of these conditions getting fulfilled, we continue to remain in a 27-month long upward rising channel.

Global volatility has remained all through the previous week and is expected to remain in the coming week as well. We are also likely to remain affect with this global volatility as well. The coming week is likely to see the current week’s gains being extended. However, though follow up gains are expected, they will not come without some range bound volatile consolidation in the coming week.

The coming week will see the levels of 10390 and 10495 acting as immediate resistance area. Supports are expected at 10210 and 10115 zones. The range is likely to remain little wider in the coming week as we discount the probable volatility that is expected.

The Weekly RSI 51.3775 and it remains neutral showing no divergence against the price. Weekly MACD stays bearish as it trades below its signal line. A white body appeared on candles. This is little larger than the average and remains significant as it has emerged near an important support area on the Weekly Charts.

If we resort to Chart Pattern Analysis, the NIFTY is seen in a steady 27-month long upward rising channel that began in early 2016. The support of 10040 was held and the NIFTY presently continues to remain in this upward channel without any violation.

Overall, we maintain a positive bias for the coming week. Attention will be drawn towards the sectors which have shown under-performance since long. We will see some out-performance from such sectors which are showing evident improvement in relative strength against the general markets. While using consolidation phases to make select purchases, positive outlook is advised for the coming week.

A study of Relative Rotation Graphs – shows that there is evident loss of momentum in the IT pack and this is likely to extend in the coming week as well leading to slight loss of momentum in the IT Stocks. Coming week will see sharp improvement in relative performance of AUTO, ENERGY, INFRA and broader Indices like CNX200, CNX100 and MIDCAP Universe along with NIFTY Next 50. These are the quarters which were undergoing sharp loss of momentum over previous week. With the relative momentum sharply improving in these Indices, they are expected to perform better. Apart from this, METAL pack may remain stagnant, and no major out-performance is expected from PSU Banks, PSE, REALTY and SMALL Cap universe.

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

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

Friday, April 6, 2018

MARKET OUTLOOK FOR FRIDAY,APR 06, 2018

MARKET OUTLOOK FOR FRIDAY,APR 06, 2018

The power of short covering was on full display in the Indian Markets on Thursday. Very much on expected lines, the benchmark index NIFTY50 saw a gap up opening. Even better was that this was sustained and the Markets grew even stronger before they ended. The NIFTY ended the day with a robust gain of 196.75 points or 1.94%.

Given the kind of shorts that were seen being created and still existing in the system, there are high chances that such up move primarily fed by short covering is likely to continue. Post RBI Credit Policy, the bank stocks saw tremendous momentum after the dovish stance that the RBI took while keeping the key rates unchanged.

We can expect a positive opening once again on Friday and we expect the follow-up up move to persist at least in the initial trade. Friday’s session will see the levels of 10365 and 10400 playing out as immediate resistance area while supports are expected to come in at 10275 and 10210 zones.

The Relative Strength Index – RSI on the Daily Chart is 52.3407 and has reached its highest value in last 14-days which is bullish. RSI also shows a bullish divergence as RSI marked a fresh 14-period high while NIFTY did not. RSI is also seen breaking out of a formation and is seen inching higher. Daily MACD stays bullish trading above its signal line.

If we look at pattern analysis, the session remained technically significant. The NIFTY not only moved past and ended above 200-DMA which stand at 10192, the NIFTY has also moved past the 10180 mark which also happen to be an important support resistance. Now, in event of any consolidation happening, we expect this level of 10180 to provide pattern support to the Markets.

Overall, though with intermittent consolidations, we expect the up move to extend itself. Some evident improvement in relative ratio and momentum is seen and this will see sector specific out performances continuing. Despite Thursday’s up move there are still large number of shorts that are seen existing in the system and this is likely to fuel the follow through up moves. Any consolidation or minor intermittent corrective moves should be continued to be used for making quality purchases.

Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)

Thursday, April 5, 2018

MARKET OUTLOOK FOR THURSDAY,APR 05, 2018

MARKET OUTLOOK FOR THURSDAY,APR 05, 2018

What was a session of perfect consolidation in the first half, turned out to be an equally dismal one when the Markets reacted to the imposition of tariffs by China in a counter move. Though the reaction was very much knee-jerk in the nature, the NIFTY ended the day with a deep cut losing 116.60 points or 1.14%.

The nominal damage that the Wednesday’s session did was that the NIFTY slipped and ended below the 200-DMA which stands at 10188. Going in to trade on Thursday, given the large number of shorts that are created, we expect a positive start. However, there are chances that the NIFTY once gain tests the 200-DMA and consolidates around those levels.

Thursday will see the level of 10190 and 10245 as the immediate resistance area for the Markets. Supports come in at 10080 and 10040 zones.

The Relative Strength Index – RSI on the Daily Chart is 42.7459 and it remains neutral showing no divergence against the price. The Daily MACD still remains bullish as it trades above its signal line. A big black body that emerged on Candle reinforces the credibility of the resistance area at the place where it occurred.

The pattern analysis shows that the Markets have suffered a minor breach as it ended below its 200-DMA. Even if it shows a likely positive start given the large amount of short positions, the likely resistance that it can face at 200-DMA cannot be taken lightly as of today.

Overall, it is evident that large number of shorts was added to the system in the previous session. Further taking into account the reaction that is likely to remain more of a knee-jerk in nature, we might see the Markets attempting to recover some of its losses that it suffered on Wednesday. However, with the fact that the NIFTY has ended below 200-DMA, theoretically speaking, this level may act as resistance while it attempts to pullback. We advise against creating aggressive positions and also against creating fresh shorts. While preserving cash, cautious outlook is advised for the day.

STOCKS TO WATCH:

Fresh short positions were seen being added on counters VEDANTA, CGPOWER, HIND ZINC, HINDALCO, NTPC, HCC, ITC, ONGC, SAIL, TATA STEEL, HDFC BANK, COAL INDIA, LARSEN & TOUBRO and WIPRO.

(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)

Wednesday, April 4, 2018

MARKET OUTLOOK FOR WEDNESDAY,APR 04, 2018

MARKET OUTLOOK FOR WEDNESDAY,APR 04, 2018

While trading much on the expected lines, the Indian Markets consolidated for the major part of the day on Tuesday. What remained technically significant was that the NIFTY behaved much in the resilient manner to the global weakness. Even more important was that while it consolidated on Tuesday, it took support once again at its 200-DMA and rebounded from there. It finally ended the day gaining 33.20 points or 0.33%.

As we approach Wednesday, we need to watch the Markets on similar lines. Runaway up move may not occur but overall, the Markets may see the follow through up move. However, before such follow through up move happen, we may once again see a range bound consolidation wherein NIFTY is once again expected to continue to defend the 200-DMA which stands at 10186.

The levels of 10275 and 10330 will play out as immediate resistance area for the Markets. Supports are expected to come in at 10185 and 10120 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.0716 and it continues to remain neutral against the price showing no divergence. The Daily MACD stays bullish while trading above its signal line.

The pattern analysis shows that the NIFTY has managed to slowly crawl back above the 10180 which was also one of the important pattern resistance areas before. With the 200-DMA inching litter higher, in event of any consolidation happening, the levels of 10180 are expected to act as support.

Overall, we do not expect a runaway rise happening given the overbought nature of the some of the oscillators and also relatively higher NIFTY PCR (Put to Call Ratio). However, under no circumstances this point towards any kind of impending weakness. We expect the Markets to consolidate and keep making efforts to inch higher. Any consolidation, if any, will lend health to the Markets to move higher. We reiterate our advice to keep making select purchases during the periods of minor consolidation and maintain a stable outlook on the Markets.

STOCKS TO WATCH:

Fresh long positions were seen being added on counters like BANK OF BARODA, SOUTH BANK, NHPC, TATA MOTORS, DLF, HDIL, VEDANTA, FEDERAL BANK, ASHOK LEYLAND, NCC and SAIL.

(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)

MARKET OUTLOOK FOR TUESDAY,APR 03, 2018

MARKET OUTLOOK FOR TUESDAY,APR 03, 2018

The Markets opened after a long weekend on Monday but did not enjoy a buoyant start that was expected out of it. The benchmark NIFTY opened on just a modestly positive note and resisted near the 200-DMA for the major part of the session. However, the second half of the session saw the Markets gaining strength with the NIFTY not only crossing the 200-DMA but ending modestly above it as well gaining 98.10 points or 0.97% in Monday’s trade.

As we approach Tuesday, NIFTY faces some chances of consolidation once again. From technical perspective, Monday’s session was important as the NIFTY ended above 200-DMA which stand at 10182. We expect a quiet start to the trade and expect some consolidation in the initial stage. It would be important to see if the NIFTY takes supports near the 10180-mark while it faces possible consolidation.

The levels of 10245 and 10320 are likely resistance area for the Markets on Tuesday. Supports come in at 10180 and 10135 levels.

The Relative Strength Index – RSI on the Daily Chart is 46.3027 and it continues to remain neutral against the price showing no divergence. The Daily MACD has reported a positive crossover and it is now bullish while trading above its signal line. We had mentioned this possibility in our previous note. A white body emerged on the Candles.

The pattern analysis shows that the NIFTY has attempted to move past the 10180-mark which was the 200-DMA of the Markets and also coincided to be the important pattern resistance area for the Markets. Though this has not been significantly breached on the upside, the likelihood of the continuation of the up move definitely remains.

Overall, in all probabilities, we may see some minor consolidation and then NIFTY continuing the pullback that it has started after defending the crucial 10040-mark. Having said this, we reiterate continue making select purchases with each consolidation or a minor corrective move that occurs. We will continue to see select outperformance from select stocks sprinkled over few sectors. Cautious optimism is advised for the day.

STOCKS TO WATCH:

Stocks like HEXAWERE, CG POWER, HIND ZINC, VEDANTA, INDIABULLS REAL ESTATE, TATA POWER, JAMNA AUTO, BOMBAY DYEING, NBCC and TRIDENT continue to see a relatively bullish technical set up.

(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)

Monday, April 2, 2018

MARKET OUTLOOK FOR MONDAY,APR 02, 2018

MARKET OUTLOOK FOR MONDAY,APR 02, 2018

The Indian Markets will open after a period of slumber because of a long weekend. The session on Wednesday, which was the last trading day of the previous week as well as the expiry day saw the Markets ending of a weaker note with NIFTY losing 70.45 points or 0.69%.

The Global Markets were shut only on Friday on account of Good Friday. On Thursday, they have ended on much stronger note. In all likelihood, our domestic Markets are likely to see a strong opening and the NIFTY may open above the 200-DMA level of 10180. As always been the case, it would be critical to see if the Markets are able to capitalize on the likely stronger opening that it is set to get on Monday. Sustenance and closing above the 200-DMA will be key technical point to watch for.

The levels of 10180 and 10225 will act as immediate resistance levels for the Markets. Supports come in at 10075 and 10040 zones.

The Relative Strength Index – RSI on the Daily Chart is 40.7668 and it stays neutral showing no divergence against the price. The Daily MACD is bearish while trading below its signal line. However, it is moving towards reporting a positive crossover. No significant formations were seen on Candles.

Looking at pattern analysis, it is observed that the levels of 10180 which is the 200-DMA for the Markets also happens to be one of the important pattern resistance for the Markets as well as evident from the Chart. This level, once breached on the upside is likely to act as support going ahead.

Overall, there are high probabilities of the NIFTY enjoying a strong opening on Monday. However, moving past and sustaining above the 200-DMA will be crucial. If the NIFTY moves past and sustains above the 10180-mark, it would be a significant technical development and NIFTY, in that case, will mark a temporary bottom for itself for the immediate short term. Positive outlook is advised for the day.

Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)

Sunday, April 1, 2018

WEEKLY MARKET OUTLOOK FOR APR 02 THRU APR 06, 2018

WEEKLY MARKET OUTLOOK FOR APR 02 THRU APR 06, 2018

In our previous Weekly note, we had mentioned about Markets modestly breaching the 27-month long upward rising channel. Though the lead oscillators were pointing towards being oversold, the level of 10040 remained important all through the previous week.

In the week that had just 3-trading sessions, the Markets ended on a positive note. The benchmark Index, NIFTY50, ended the week with net gains of 115.65 points or 1.16% on weekly basis. One of the most important factors to take note of is that the NIFTY has managed to defend and crawl back above the critical 10040-mark and therefore the 24-month long upward rising channel remains intact.

As we approach the coming week, we expect a positive start to the week and we expect the NIFTY to open and move past 200-Day Moving Average which stands at 10180. Going ahead all through the coming week, it would be crucial to see if the NIFTY manages to end above 200-DMA.

The Relative Strength Index – RSI on the Weekly Chart is 45.0478 and it remains neutral showing no divergence against the price. The Weekly MACD is bearish and it trades below its signal line. No major pattern was observed on Candles.

While having a look at pattern analysis, NIFTY has defended and has managed to crawl back above the 10040-mark. This level was crucial and with this level being defended as of now, the 27-month long upward rising channel remains intact.

Next week’s strongly opening is nearly ensured by the global markets which have ended on the strong note. However, it may be extremely important to see that despite a very likely strong start which will see NIFTY above the 200-DMA mark in all likelihood, the sustenance above this level and closing above this level by NIFTY will be important. Also, the NIFTY remains oversold on Stochastic on Weekly Charts and overall we see the downsides being very limited. In any case, defending 10040-mark will be crucial not only in next week but in coming days as well. Overall, we expect positive undertone to dominate and we advice maintaining positive outlook through the week ahead.

A study of Relative Rotation Graphs – RRG this week though majority of the sectors are still seen mildly losing relative momentum and ratio, many key sectors are seen improving their relative momentum against the Markets and are attempting for major stability. The coming week will still see relative outperformance from Services, Financial Services, FMCG and IT pack. Other key sectors like INFRA, AUTO, Midcap 50, NIFTY NEXT 50 and ENERGY are seen improving their relative momentum. Therefore, these packs may see select out-performance by their components. Apart from this, we do not expect any major moves on Weekly basis from PHARMA, PSU BANKS, BANKNIFTY, and Small Cap universe.

(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)

Gemstone Equity Research & Advisory Services

Saturday, April 7, 2018

WEEKLY MARKET OUTLOOK FOR APR 09 THRU APR 13, 2018

Friday, April 6, 2018

MARKET OUTLOOK FOR FRIDAY,APR 06, 2018

Thursday, April 5, 2018

MARKET OUTLOOK FOR THURSDAY,APR 05, 2018

Wednesday, April 4, 2018

MARKET OUTLOOK FOR WEDNESDAY,APR 04, 2018

MARKET OUTLOOK FOR TUESDAY,APR 03, 2018

Monday, April 2, 2018

MARKET OUTLOOK FOR MONDAY,APR 02, 2018

Sunday, April 1, 2018

WEEKLY MARKET OUTLOOK FOR APR 02 THRU APR 06, 2018

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