Gemstone Equity Research & Advisory Services: 5/27/18

Saturday, June 2, 2018

WEEKLY MARKET OUTLOOK FOR JUN 04 THRU JUN 08, 2018

WEEKLY MARKET OUTLOOK FOR JUN 04 THRU JUN 08, 2018

After closing on a flat note in the week before this week, the current week saw the Markets ending with minor gains. On a week-to-week basis, NIFTY ended this week gaining 91.05 points or 0.86%. In our previous Weekly note, we had mentioned about formation of a probable lower top. This formation still remains the resistance area for the Markets in the coming days.

As we step into the coming week, we face an important economic event of RBI Credit Policy slated to come out on June 06. Apart from this, we do not see any major triggers for the Markets and do not expect a run-away rally in the Markets in the coming week. The falling trading line that has emerged out of the formation of a lower top is likely to resist any significant up move that the Markets may attempt.

Coming week will see the levels of 10790 and 10865 playing out as immediate resistance area for the Markets. Supports come in lower at 10610 and 10515 zones. The range remains wider this week on either side.

The Weekly Relative Strength Index – RSI stands at 57.7511 and it remains neutral showing no divergence against the price. Weekly MACD stays bullish while trading above its signal line. No significant observations were seen on Candles.

If we look at pattern analysis, after forming a lifetime high of 11171, the NIFTY has formed a lower top at 10930. This emergence of a lower top has resulted into formation of a falling trend line joining these two levels. In the coming week, this will pose resistance to the Markets in event of any attempted up move.

Overall, despite the likelihood that the NIFTY may not witness any runaway up move beyond a point, it still remains very much in the 28-month long upward rising channel. The coming week is likely to continue to remain extremely stock specific in nature. We recommend spotting smart buying opportunities that any corrective move may offer and at the same time, continue to protect profits at higher levels.

A study of Relative Rotation Graphs – shows that the coming week will see Financial Services stocks continuing to relatively outperform the general Markets. They are likely to be accompanied by FMCG Stocks who still remain in the leading quadrant but are seen slowing down a bit. Apart from this, we expect PSU Banks and components of Bank NIFTY attempting to improve their relative momentum as well. Apart from this some isolated and sporadic out-performance are a expected from METALS, Public Sector Enterprises and Realty pack. We do not expect any significant out-performance from the broader Markets as all broader Indices like MIDCAPS, CNX100, CNX200 and CNX500 are seen deteriorating on the momentum front. Auto stocks too are not expected to put up any significant show on a weekly note.

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, June 1, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 01, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 01, 2018

The May derivative series ended on a robust note as the benchmark Index NIFTY50 saw a sharp surge in the second half. It ended the day gaining 121.80 points or 1.15%. In our previous note, we had mentioned about likely short covering in the second half of the trade as May had significant amount of short positions existing in the system. Thursday’s session traded much on the expect lines and it did witness a sharp surge on account of short covering.

As we approach Friday, though we do expect a quiet to modestly positive start, the NIFTY has once again moved towards that situation wherein a consolidation or a mild retracement at higher levels should not surprise us. A modest up move cannot be ruled out on Friday but in the same breath, NIFTY may witness some corrective retracements from higher levels.

Friday will see the levels of 10750 and 10795 will play out as immediate resistance area for the Markets. Supports come in at 10650 and 10600 zones.

The Relative Strength Index – RSI on the Daily Chart is 57.75 and it remains neutral showing no divergence against the price. It is seen marking a higher bottom and inch higher. Though Daily MACD is still bearish, it is on verge of reporting a positive crossover.

Pattern analysis reveals a interesting picture. The NIFTY has validated the support of 50-DMA at Close levels and has move past 100-DMA as well. It halted at its short term 20-DMA but in Thursday’s session, it has not only moved past its short term 20-DMA but has moved past the multiple pattern resistance zones of 10600-10650 levels.

Overall, for the immediate short term, we can fairly expect the NIFTY to continue with its up move and we expect NIFTY to test its upper band of 10860-10890 zones. However, this is not likely to happen without any minor corrective retracements. Though the NIFTY shall overcome this, the zones of 10860-10890 will still remain a formidable resistance on the long term charts. We recommend making select purchases and riding the momentum. However, we also recommend maintaining high levels of vigilance at higher levels. Each up move shall protecting existing profits more important in coming days.

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

Thursday, May 31, 2018

MARKET OUTLOOK FOR THURSDAY,MAY 31, 2018

MARKET OUTLOOK FOR THURSDAY,MAY 31, 2018

The second-last day of expiry of the current derivative series saw the Markets oscillating in a 80-point range. The Markets saw a modestly negative opening and got weaker in the early trade. However, a sharp recovery followed and after a ranged oscillation, the NIFTY ended the day posting nominal loss of 18.95 points or 0.18%.

As we approach the expiry day on Thursday, we expect the Markets to maintain a similar range. The support was seen coming in near 100-DMA which stand at 10544 while it will face resistance in the 10650-10680 zones. The amount of shorts that still exists in the system are likely to coming into play as the session is expected to remain dominated with rollover centric activities.

Thursday will see the levels of 10650 and 10680 playing out as immediate resistance area for the Markets. Support is expected to come in at 10540, near its 100-DMA and after that near 10500 level.

The Relative Strength Index – RSI on the Daily Chart is 50.6014. RSI continues to stay neutral showing no divergence against the price. Daily MACD stays bearish while trading below its signal line. No significant formations were seen on Candles.

Pattern analysis shows two important levels coming into picture. First is the 100-DMA level which is seen coming into picture as NIFTY took support at this level in the previous session. Secondly, on the upper side, the level of 10650 which happens to be the multiple pattern resistance is likely to pose resistance in event of resumption of the pullback.

Overall, there is significant number of shorts that were seen being added and they still continue to exist. We expect a quiet opening to the trade and a range bound movement in the early part of the session. However, there are chances that the Markets see sharp moves as some short covering might happen. The primary reason for this likelihood is the though the month of May continued to see addition of shorts, the month of June have been witnessing long rollovers. We recommend a cautious but positive view on the Markets for the day.

STOCKS TO WATCH:

Favorable technical setup is observed in stocks like IDBI BANK, INDOSOLAR, LT FOODS, COAL INDIA, BLISS GVK PHARMA, CUMMINS INDIA, KITEX and ASTRA ZENECA PHARMA.

(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, May 30, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 30, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 30, 2018

After three days of a robust up move, the Indian Equity Markets took a breather. The benchmark Index NIFTY50 showed minor retracement post quiet opening on Tuesday. The Markets pared some gains as the NIFTY ended the day losing 55.35 points or 0.52%.

As we approach Wednesday’s trade, we enter the penultimate day of expiry current derivative series which happens to be one of the longest ones of the year. We expect the trade to remain dominated with rollover centric activities and also remain highly stock and sector specific.

We once again expect a quiet opening to the Wednesday’s trade. There are chances that Markets may continue to exhibit sluggish behavior with consolidation continuing though it is likely to have limited downsides with the zones of 10580-10600 acting as important pattern supports.

We expect the levels of 10650 and 10710 to act as immediate resistance levels for the Markets. Supports come in at 10600 and 10550 zones.

The Relative Strength Index – RSI on the Daily Chart is 51.8694 and it remains neutral showing no divergence against the price. The Daily MACD still remains bearish. However, it is seen narrowing its trajectory and in absence of any major downsides, this indicator might see positive crossover. On Candles, a small engulfing bearish candle has occurred. Though this candle is very small, relatively speaking. However, it can temporarily stall an ongoing up move.

The pattern analysis show the major pattern supports of 10580-10600 coming into play once again. In event of a continued consolidation, these levels are expected to act as support in the immediate short term.

Overall, in absence of any major triggers, we may see some consolidation continuing in the Markets. This activity is also likely to have very limited downsides, if any. We expect the zones of 10580-10600 acting as important pattern supports. Any further dip may see the NIFTY testing its 100DMA once again. We reiterate to continue to make select purchases while continuing to vigilantly protect profits at higher levels.

STOCKS TO WATCH:

Long positions were seen being added in stocks like IDEA, JSW STEEL, ADANI POWER, TATA POWER, BHEL, NCC, INFOSYS, SAIL, ASHOK LEYLAND, DABUR, M&M and LARSEN & TOUBRO.

(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)

Tuesday, May 29, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 29, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 29, 2018

For the third day in a row, the NIFTY continued to pile gains as the benchmark Index ended the day gaining 83.50 points or 0.79%. With Monday’s trade which also marked a strong beginning to a new week, the NIFTY has tested its 20-DMA and has attempted to move past it.

Going into trade on Tuesday, on a broader note, we expect the positive environment to remain in the Markets. The two major positives for the Markets are the sharp decline in Crude oil and also the sharp coming off of the US10YR Bond Yields which are technically aiding the Markets.

We expect a quiet start to the trade today but we expect that despite some minor consolidation that we might encounter, the NIFTY is likely to see itself on its advancing trajectory. The caution towards possible consolidation comes from the fact that NIFTY has risen just short of 300-points from the lows seen three sessions back.

Tuesday is likely to see the levels of 10745 and 10790 acting as immediate resistance area for the Markets. Supports come in at 10645 and 10600 mark.

The Relative Strength Index –RSI on the Daily Chart is 55.6517 and it remains neutral showing no divergence against the price. The Daily MACD is still bearish as it trades below its signal line. On the Candles, a rising window occurred. This usually a candle gapping above the previous one and often indicates potential continuation of up move.

The pattern analysis show NIFTY firmly on its pullback trajectory after validating support of 50-DMA at Close levels and pulling back and moving past its 100-DMA as well.

Overall, though the momentum may not be blindly chased, the overall set up looks buoyant and we may see continuation of up move with a minor chances of some consolidation happening. We will continue to see stock specific performance from sectors like financial services and FMCG. Apart from this, isolated stock specific purchases may also be seen. We recommend continuing making smart purchases while continuing to protect profits at higher levels.

STOCKS TO WATCH:

Resilient technical set up is observed in stocks like RNAVAL, HINDPETRO, ONGC, MANAPPURAM FINANCE, ONGC, BPCL, ITC, PETRONET LNG, DELTA CORP and NATIONAL ALUMINUM.

(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, May 28, 2018

MARKET OUTLOOK FOR MONDAY,MAY 28, 2018

MARKET OUTLOOK FOR MONDAY,MAY 28, 2018

Indian Equity Markets continued its upsurge for the second day in a row on Friday as the NIFTY advanced its gains and ended the day gaining 91.30 points or 0.87%. Though select buying was evident in some stock specific moves, bulk of the up move has come from short covering in the Markets. What was technically important was that the NIFTY has validated 50-DMA as its support at Close and also it has moved past and closed above the 100-DMA level which now stands at 10539.

We enter the expiry week of the current derivative series. We expect a quiet opening to the trade on Monday and expect NIFTY to advance to the short term 20-DMA which stand at 10668 and also expect NIFTY to encounter multiple pattern resistances there.

Monday will see the levels of 10660 and 10695 acting as immediate resistance levels for the Markets. Supports come in at 10540 and 10480 zones.

The Relative Strength Index – RSI on the Daily Chart is 50.6063 and it remains neutral showing no divergence against the price. The Daily MACD stays bearish while it trades below its signal line. However, it is seen narrowing its trajectory. Apart from a white body that occurred, no significant formations were observed on Candles.

Pattern analysis of NIFTY reveals that the Index is within striking distance of its short term 20-DMA which also happen to be its important pattern resistance area for the Markets. There are chances that the Markets may stall its up move there and see some consolidation happening in a narrow range.

Overall, with quiet opening to the trade expected on Monday, we expect the session to remain much range bound in nature. We expect some minor gains in the Markets in general but also expect the up move to get stalled for a short while near the short term 20-DMA. In event of any minor corrective move, the 100-DMA levels may act as support at Close levels. We recommend refraining from shorts and continue to make modest stock specific purchases. A positive, but cautious view is advised for the day.

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

WEEKLY MARKET OUTLOOK FOR MAY 28 THRU JUN 01, 2018

WEEKLY MARKET OUTLOOK FOR MAY 28 THRU JUN 01, 2018

Markets continued its up surge in Fridays trading session as well but despite gaining nearly 190-odd points from the previous two sessions, the benchmark NIFTY50 ended the week flat. The NIFTY ended the week gaining 8.75 points or 0.08% on weekly basis. The week that has gone by has remained quite volatile to say the least as the Index saw itself swinging back and forth in a wide range with volatility accompanying it.

As we step into the coming week, we will also face expiry of the current derivative series. Speaking on broad terms, with the NIFTY forming a lower top after 11100 levels at 10930, we still rule below this area. There are all likelihood of volatility refusing to go away and we will see the Markets trading in a bit wider range with good amount of volatility ingrained in the sessions to come.

The resistances for the coming week are expected to come in at 10735 and 10850. Supports are expected to come in at 10485 and 10390 zones.

The Relative Strength Index – RSI on the Weekly Chart is 55.45 and it remains neutral showing no divergence against the price. Daily MACD stays bullish while trading above its signal line. On the Candles, a Candle with long lower shadow occurred. Since this holds importance only when it occurs during an downtrend, it has no significance in the present context.

While having a look at pattern analysis, NIFTY continues to remain in the 27-month long upward rising channel and also the Moving Averages remain in order with each smaller one trading above the larger. It remains to be noted that with the RSI remaining neutral, it too has formed a lower top for itself as evident from the Charts.

Overall, in any given scenario wherein the NIFTY might see the continuation of the pullback, the upsides are likely to remain capped from now on in the 10800-10875 mark. Once the NIFTY approaches these levels we will have to deal with that formation with great amount of caution. We expect NIFTY might continue to move up but at the same time might encounter profit taking at higher levels as well. We now recommend protecting positions at each higher level. The coming week and weeks after that will give rewards much on the basis of effective stock selection and sector rotation that will be done.

A study of Relative Rotation Graphs – shows that in the coming week, the Financial Services pack along with FMCG is set to relatively outperform the Markets. Though IT Pack did see some moves, it has continued to steadily lose momentum and is likely to continue to slow down and lose the momentum. Along with this, we will see some relative improvement in momentum in BANKNIFTY pack. We are also likely to see METALS and PSU BANKS continuing with their trajectory to improve in relative momentum. We do not see any notable performance coming from REALTY, INFRA, AUTO, and other broader indices. These sectors will see only stock specific performances only.

(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, June 2, 2018

WEEKLY MARKET OUTLOOK FOR JUN 04 THRU JUN 08, 2018

Friday, June 1, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 01, 2018

Thursday, May 31, 2018

MARKET OUTLOOK FOR THURSDAY,MAY 31, 2018

Wednesday, May 30, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 30, 2018

Tuesday, May 29, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 29, 2018

Monday, May 28, 2018

MARKET OUTLOOK FOR MONDAY,MAY 28, 2018

WEEKLY MARKET OUTLOOK FOR MAY 28 THRU JUN 01, 2018

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