WEEKLY MARKET OUTLOOK FOR MAY 14 THRU MAY 18, 2018

WEEKLY MARKET OUTLOOK FOR MAY 14 THRU MAY 18, 2018

In our previous Weekly note, we had pointed out emergence of 10785-mark  as not only a likely-lower-top but also an important resistance area for the Markets. The week that went by saw fierce consolidation happening in the Markets and the NIFTY resisted all week along to the 10785-mark. On the last day of the trading week, the NIFTY which had showed so much resilience all through the week, attempted to move past this resistance area. The benchmark NIFTY ended the week closing a notch above this level gaining 188.25 points or 1.77% on a weekly note.

As we enter into next week, the behavior of the Markets vis-à-vis the 10785 level would be extremely critical to watch for. If the NIFTY manages to move past this level in a convincing manner, we will see NIFTY moving towards its previous highs. Any slip below this will push the Markets again into some consolidation.

The coming week will see the levels of 10890 and 10975 acting as immediate resistance area. Supports come in at 10730 and 10610 zones. The range for the Markets is likely to remain little wider this week.

The Relative Strength Index – RSI on the Weekly Chart is 61.9829 and it has marked a fresh 14-period high. Also, RSI is seen breaking out of a pattern and is likely to lend strength to the Markets. Weekly MACD has reported a positive crossover and it is now bullish while trading above its signal line. No significant formations on Candles were noted this week.

The pattern analysis had raised the possibility of the level of 10785 acting as an important resistance mark for the Markets. It had also raised the possibility of it becoming a lower top. However, with the NIFTY attempting to move past this level, the coming week will remain extremely crucial to determine the short term trend of the Markets.

Overall, we are expected to see a modestly positive opening in the Markets if there are no overnight surprises in the global picture. Markets have political event of Karnataka election results to face which is likely to infuse some volatility in the Markets. Apart from this, if nothing untoward comes out of it, we will see NIFTY marking higher levels. We recommend remaining very selective and identify sectors which show strength once directional confirmation is established. Cautious but positive outlook is advised for coming week.

A study of Relative Rotation Graphs – shows though we did see some performance from IT Stocks in the week, it has continued to lose relative momentum on week-on-week basis. The broader indices like NIFTY Next 50 and NIFTY MID50, along with NIFTY INFRA has suddenly seen lows of relative momentum if seen on a weekly note. The coming week is likely to see relative out-performance from AUTO, FINANCIAL SERVICES, and select stocks of BANKNIFTY and PSU Banks which is showing mild improvement in its relative performance. Select ENERGY, MIDCAPS, and REALTY will see selective outperformance against the general Marktes.

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

MARKET OUTLOOK FOR FRIDAY,MAY 11, 2018

MARKET OUTLOOK FOR FRIDAY,MAY 11, 2018

As outlined in our previous note about the importance of the resistance level of 10785, the NIFTY resisted precisely to that level in Thursday’s trade marking the high of 10785.55. NIFTY saw paring 80-points from that level and settled the day with minor loss of 25.15 points or 0.23%. The underperformance was seen more in broader Markets which lose anywhere in the range of 0.40% to 1.89%.

As we approach end the week, the NIFTY is going to face stiff resistance to the 10785 mark and this level will be marked as immediate major resistance are for the Markets for the immediate short term. That being said, we would also like to reiterate that with the amount of consolidation that is being seen and the way NIFTY is resisting any major downsides, it is gathering strength for the long run.

The levels of 10750 and 10785 will act as immediate resistance area for the Markets. Supports come in at 10685 and 10650 zones.

The Relative Strength Index – RSI on the Daily Chart is 62.4278 and it stays neutral against the price showing no divergence. The Daily MACD still remains bullish while trading above its signal line. On the Candles, a black body occurred. Its emergence exactly near the resistance area marks the credibility of the resistance level of 10785.

The pattern analysis shows consolidation occurring in the 10650-10785 zones after a breakout from the rectangle formation. If the Markets suffer a complete throw back, the levels of 10500 should act as important support. However, given the resilience that NIFTY is showing to any downsides, we expected this consolidation in a limited range to continue.

We believe there is still some room left for such range bound consolidation to continue. It is also important to note that given the fact that NIFTY has remained resilient to any major downsides so far, this should be viewed as underlying strength. We expect such consolidation to continue. Any downsides, if any, shall remain limited and any such down moves should be utilized to make fresh purchases. However, focus is likely to remain on defensive sectors until Markets achieves a fresh breakout. We recommend making select purchases in defensives with each down move but still continue to keep overall positions at moderate levels. Cautious view is advised until the level of 10785 is breached on the upside.

STOCKS TO WATCH:

Short positions were seen being added in FEDERAL BANK, DISH TV, IDEA, BHEL, JAIN IRRIGATION, SAIL, PFC, PNB, TATA MOTORS, AMBUJA CEMENTS, TATA MOTORS, ASHOK LEYLAND, NTPC and NCC.

(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

MARKET OUTLOOK FOR THURSDAY,MAY 10, 2018

MARKET OUTLOOK FOR THURSDAY,MAY 10, 2018

After a brief pause and a tepid start to the day, the Wednesday’ session saw some advancement in the NIFTY as the Index ended the day gaining 23.90 points or 0.22%. Bulk of the gains came in the second half of the session though the session remained dominated with highly stock specific activities. However, despite putting on modest gains, the NIFTY still remains little bit away from the immediate past high of 10785.

As we step into Thursday’s trade, we expect a quiet start to the day. If there are no overnight surprises, we expect NIFTY to inch higher and attempt to test the 10785-mark. However, this level will still continue to pose and act as immediate resistance level for the Markets which is important enough to push Markets into some more consolidation.

The levels of 10785 and 10830 will act as immediate resistance area for the Markets. Supports are expected to come in at 10710 and 10660 zones.

The Relative Strength Index – RSI on the Daily Chart is 65.0525. RSI shows bearish divergence against the price as it did not mark a 14-period high while the NIFTY ended on a 14-year high on Closing basis. No significant formations were seen on Candles.

Having a look at pattern analysis, it becomes evident that the brief consolidation that the Markets witnessed after testing immediate past high level of 10785 has in fact lent some strength to the Markets. Instead of facing a outright throwback and testing the breakout levels, NIFTY has chosen to consolidate in a given range.

We believe modest up move will continue in the Markets. Having said this, with the NIFTY still not having moved past the 10785-mark, this level is still supposed to be regarded as important resistance levels for the Markets. There are possibilities that the NIFTY might show an up move and attempt to test those levels. However, it still remains vulnerable to be pushed into consolidation once again from those levels. Fresh sustainable up move shall occur only after NIFTY moves past the 10785-mark comprehensively.  

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

MARKET OUTLOOK FOR WEDNESDAY,MAY 09, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 09, 2018

Following a strong surge on Monday, Tuesday’s session failed to see any follow up move and the Markets once again faced consolidation on expected lines. The NIFTY failed to move past the 10785-mark and chose to consolidate in a range. The indexes headed nowhere and continued to oscillate in a given capped range. The NIFTY ended on a flat note gaining 2.30 points or 0.02%.

We keep our analysis on similar lines for Wednesday’s trade. We expect the Wednesday’s trade to begin on a quiet note and in all likelihood; we will see the Markets continuing with consolidation. We will continue to see the levels of 10785 continuing to act as immediate resistance area for the Markets.

We expect the levels of 10755 and 10785 to act as immediate resistance levels. Supports come in at 10690 and 10660 zones.

The Relative Strength Index – RSI on the Daily Chart is 63.7060. It continues to remain neutral showing no divergence against the price. Daily MACD still stays positive while trading above its signal line. No significant formations were observed on Candles.

The pattern analysis of the Daily Charts also does not present any different picture. The NIFTY has broken out from a broad rectangle formation, tested highs at 10785 and then has shown a throwback followed by some consolidation once again.

Overall, the current structure of the Charts has established the levels of 10785 as the immediate short term resistance level for the Markets. For any sustainable up move to emerge, NIFTY will have to move past the 10785-mark. Unless that happens, a sustainable resumption of up move will continue to elude us exposing Markets to some more consolidation in a capped range. We will see stock specific performances dominating the trade landscape. Market breadth will also be important to be watched. We recommend keeping exposures moderate and adopt stock specific approach for the day.

STOCKS TO WATCH:

Favorable technical set up is seen in stocks like EXIDE INDUSTRIES, BANK OF BARODA, IDEA, L&T FINANCE, FIRST SOURCE SOLUTIONS, DLF, and RELIANCE INDUSTRIES.

(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

MARKET OUTLOOK FOR TUESDAY,MAY 08, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 08, 2018

Monday’s session saw a buoyant start to the Week. The Markets saw a opening in lines with expectations and traded in a range in the first half of the session with modest gains. We saw strength coming in especially in the second half. The benchmark Index NIFTY50 got further fortified and ended the day with decent gains of 97.25 points or 0.92%.

The Markets have resumed its up move after a brief corrective spell after testing the immediate past high level of 10784. As we walk into Tuesday’s trade, we see the upbeat sentiment persisting. The Markets are likely to enjoy a positive start to the day. This being said, Markets still face chances of consolidation at higher levels and the levels of 10784 will remain important levels to watch for. Markets are still theoretically expected to face resistance at those levels if we speak of immediate short term.

The levels of 10765 and 10790 will act as immediate resistance area for the Markets. Supports come in at 10675 and 10630 zones.

The Relative Strength Index – RSI on the Daily Chart is 63.5806 and it remains neutral showing no divergence against the price. The Daily MACD stays bullish while trading above its signal line.

Pattern analysis reveals that after achieving a breakout from the broad rectangle zone, the NIFTY suffered a classical throwback and suffered a minor corrective decline. After a brief consolidation, NIFTY has resumed its up move. Key would be to see if it faces resistance once again at 10784 levels.

Overall, a modestly positive, but quiet start is expected in the trade on Tuesday. It is advised not to attempt to create shorts at higher levels. We will continue to see stock specific performance. The undercurrent remains very much buoyant. The levels of 10784 will be important to be watched as the Markets may face resistance at higher levels. Even if some resistance is found at higher levels, the Markets will see more consolidation once again in a given range than outright correction. We continue recommend making stock specific purchases with any decline that the Markets offer. While continuing to guard profits at higher levels, neutral to positive outlook is advised for the day.

STOCKS TO WATCH:

Fresh long positions were seen being added in FEDERAL BANK, NATIONAL ALUMINUM, EXIDE INDUSTRIES, JSW STEEL, ICICI BANK, RNAVAL, POWER GRID, PFC, HINDPETRO, YES BANK and TITAN.

(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

MARKET OUTLOOK FOR MONDAY,MAY 07, 2018

MARKET OUTLOOK FOR MONDAY,MAY 07, 2018

Friday’s session saw the corrective action getting extended as the Markets continued with its modest slide. The benchmark Index NIFTY50 continued to retrace and ended the day with a loss of 61.40 or 0.57%. The session remained relatively less volatile and therefore did not see VIX rising too much. The session also confined itself to a narrow trading range all throughout the day.

As  we approach a fresh week, stable global environment may see Indian Markets opening on a relatively stable and modestly positive mode. We may also see some technical pullback but speaking on broad terms, we will continue to see consolidation persisting in the Markets with the previous Week’s high acting as major resistance.

Monday’s trade is likely to see the levels of 10650 and 10695 acting as resistance. Supports are likely to come in at 10575 and 10540.

The Relative Strength Index – RSI on the Daily Chart is 57.8654 and it has marked a fresh 14-period low which is bearish. RSI has marked a fresh 14-period low while NIFTY has not done so. This also marks a Bearish Divergence against the price. Daily MACD still continue to trade above its signal line. No significant formations were seen on Candles.

Pattern analysis shows that after breaking out from the rectangle formation and testing immediate highs of 10785, the NIFTY has been giving a throwback. It continues to remain in this formation until it forms a higher bottom and attempts to move higher again.

Overall, though a positive and stable start is expected on Monday, we will continue to see consolidation persisting at higher levels. The Markets still continue to remain vulnerable to profit taking bouts at higher levels unless the levels of 10785 are breached on the upside. The VIX continue to remain at low levels and this keeps room for volatility to increase in the near term. Though there are no signs as yet that point towards any major downsides. While continuing to avoid shorts, any corrective moves from higher levels should be used to make fresh purchases. Highly stock specific approach with cautious view on the Markets is advised for the day.

STOCKS TO WATCH:

Relatively better technical setup is observed in stocks like TATA SPONGE, FUTURE LIFESTYLE, GAIL, BOSCH, TV18 BROADCAST, INDIGO, LT FOODS, SRS LIMITED, JMT AUTO and IVRCL.

(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