Gemstone Equity Research & Advisory Services: 6/10/18

Friday, June 15, 2018

WEEKLY MARKET OUTLOOK FOR JUN 18 THRU JUN 22, 2018

WEEKLY MARKET OUTLOOK FOR JUN 18 THRU JUN 22, 2018

The previous weekly note discussed about the likelihood of the NIFTY attempting to move past its falling trend line resistance which joins the lower tops. In the Week that went by, the benchmark Index struggled all throughout the week in attempting to move past this pattern area resistance though it made no clear headway on the upside. The pullback that was seen on the last trading session of the week saw the benchmark index NIFTY closing week with a weekly gain of 50.05 points or 0.46%.

The coming week is likely to remain critical. The zones of 10820-10850 will continue to remain critical and in the same breath, we will see NIFTY attempting to move past the pattern resistance of this falling trend line which joins the lower tops. The coming week will also see some volatility creeping in the Markets though the undercurrent is likely to remain buoyant.

Next week will see the levels of 10890 and 10975 acting as immediate resistance levels for the Markets. Supports come in at 10765 and 10660 zones.

The Relative Strength Index – RSI on the Weekly Chart is 60.7579. The NIFTY has set a fresh 14-period high while the RSI has not and this has resulted into bearish divergence. However, in the present context, though this may restrict and resist the immediate up move but RSI is also seen trying to breakout from a pattern formation. The Weekly MACD is bullish as it trades above its signal line. No significant formations were observed on Candles.

Overall, the next week is likely to remain critical for the Markets as moving past the pattern resistance of a trend line joining a probable lower top is critically important for the Markets. We expect the Markets to remain overall range bound. The F&O data suggests that the range might get little broader but the downsides will certainly remain capped and limited. The coming week is likely to see highly stock and sector specific moves. We recommend continuing to guard profits vigilantly at higher levels. Shorts should be avoided as the undercurrent still continues to remain comfortably buoyant unless some critical supports are breached.

A study of Relative Rotation Graphs – shows that PSU banks have further improved on the relative momentum front and are expected to continue this trajectory in the coming week as well. Along with this, the Bank NIFTY pack has moved into the leading quadrant and is expected to relatively outperform. It is likely to get company from Financial Services, Services sector who are also expected to relatively out-perform. FMCG pack is likely to do well but performance may remain stock specific. Apart from this, PHARMA too are seen improving on the relative momentum front. Broader Indicess like CNX 100, CNX 200 and CNX 500 continue with its falling trajectory and this may keep any runaway up move in the general markets in check. AUTO, NIFTY Midcap Universe, Small Caps, NIFTY Next 50 too are seen continuing to deteriorate on the momentum front. No show is expected from the Media pack. IT and Realty may see sporadic out performances.

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

Thursday, June 14, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 14, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 14, 2018

In the Wednesday’s session, NIFTY made a half-hearted attempt to move past the 10850 mark which has been posing critical resistance to the Markets. In a session that remained largely range bound and capped on the upside, the NIFTY came off from the high point of the day and settled with minor gains of 13.85 points or 0.13%.

We expect a quiet start to the day but just like the previous session, the levels of 10,850 and the behavior of the Markets vis-à-vis this level needs to be critically watched. NIFTY will have to move past this level in a convincing manner for any meaningful up move to occur. If it faces resistance at higher levels just like it happened in the previous session, it is likely to be pushed into some more consolidation.

Thursday will see the levels of 10890 and 10945 as immediate resistance levels. Supports come in lower at 10810 and 10760 zones.

The Relative Strength Index – RSI on the Daily Chart is 63.0384 and it has reached marked its highest value in last 14-days which is bullish. It does not show any divergence against the price. Daily MACD stays bullish while trading above its signal line. Apart from black body that occurred on Candles, no significant formations were seen.

Going by the pattern analysis, it is seen that NIFTY is making attempts to move past the pattern resistance that exists in form of falling trend line that emerges from 11170 and subsequently joins the falling tops.

F&O data and lead indicators exhibit strong undercurrent and buoyant intent of the Markets. There are chances that though we might see some corrective swings given the current structure of the Markets, eventually it is expected that the NIFTY is likely move past 10850-mark which has been posing important pattern resistance to the Markets. We are also likely to see some volatility persisting in the trade but overall session is likely to remain range bound with limited downsides and underlying buoyant intent. While still continuing go guard profits at higher levels, selective purchases may be continued.

STOCKS TO WATCH:

Good technical set up is observed in stocks like JSW STEEL, STATE BANK, RELIANCE, ICICI BANK, YES BANK, AXIS BANK, EXIDE, POWERGRID, INDIA CEMENTS, M&M and TATA MOTORS.

(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, June 13, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 13, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 13, 2018

Though the Indian Equity Markets witnessed volatility during the day, it ended the day with some modest gains as the benchmark Index NIFTY50 gained 55.90 points or 0.52%. It was second day in a row that the Markets continued to resist to the 10820-10850 zones. In the Tuesday’s trade, after resisting to this zone for the entire day, the NIFTY ended very near to the critical 10850-mark.

Wednesday’s opening will be crucial for the Markets. After a brief consolidation in the 10820-10850 zones, if the NIFTY has to resume any meaningful up move, it will have to move past the 10850-mark and stay above that. With opening levels crucial, longer the Markets remain below this critical mark, higher will be the chances of it remaining into consolidation for some more time.

Wednesday will see the levels of 10850 and 10930 acting as important resistance levels for the Markets. Supports come in at 10780 and 10735 zones.

The Relative Strength Index – RSI on the Daily Chart is 62.3188 and it has marked a fresh 14-period high which is bullish. RSI does not show any divergence against the price but it is seen breaking out of a pattern resistance. The Daily MACD stays bullish while trading above its signal line. No significant formations were observed on Candles.

Going by the pattern analysis, NIFTY still continues to the falling trend line that joins 11179-mark to its subsequent lower tops. NIFTY will have to move past 10850 and remain above that level to attempt to resume any meaningful up move.

Overall, though NIFTY still continues to resist with the 10820-10850 zones, it has shown some inclination to move past it. F&O data suggest short covering from levels and also some fresh longs were seen being added. Though it remains slightly overstretched on the Daily Charts, NIFTY has demonstrated underlying strength and shows inclination to breakout from the current resistance area. We recommend to continue to remain highly stock specific while making purchases and extremely vigilant at higher levels unless a meaningful breakout is achieved.

STOCKS TO WATCH:

Long positions were seen being added in JSW STEEL, ICICI BANK, STATE BANK, HDFC, TCS, L&TFH, KPIT, TV18 BROADCAST, EXIDE, TATA ELXSI, BHEL, NATIONAL ALUMINUM 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)

Tuesday, June 12, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 12, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 12, 2018

In our previous note, we had expected the zones of 10820-10850 to provide stiff resistance to the Markets. Very much on the analyzed lines, the NIFTY opened positive, saw short covering during the day, posted day’s high at 10850.55 and saw itself reacting from those levels and paring much of its intraday gains. The benchmark Index ended the day with gains of 19.30 points or 0.18% coming off nearly 65-points from the high point of the day.

As we step into Tuesday, we expect the zones of 10820-1850 continuing to offer stiff resistance to the Markets. A quiet start is likely but unless the levels of 10850 are breached on the upside, NIFTY will continue to remain vulnerable to corrective actions at higher levels.

Tuesday will see the levels of 10820 and 10850 acting as immediate resistance area for the Markets. Supports come in at 10745 and 10710 zones.

The Relative Strength Index – RSI on the Daily Chart is 59.3566. It has marked a fresh 14-period high which is bullish. It does not show any divergence against the price. The Daily MACD is bullish as it trades above its signal line. On the Candles, a Shooting Star emerged. This formation is significant in the present scenario as it has occurred after an up move and near a pattern resistance area. This can potentially throw the Markets into some consolidation or minor corrective move once again.

Pattern analysis shows that NIFTY resisted precisely at the falling trend line resistance area. This trend line is formed by joining each subsequent falling tops after 10179 mark.

Overall, Tuesday’s trade may not see any runaway up move happening in the Markets. Unless the levels of 10850 is breached on the upside, we will see each up move getting stalled in the 10820-10850 zones. We continue to recommend making fresh purchases at lower levels with and make use of each corrective move, however, it would be critical to remain highly stock and sector specific in the approach. Also, on the other hand, while adopting a cautious view on the Markets profits should be guarded at higher levels.

STOCKS TO WATCH:

Relatively better technical set up is observed in stocks like NCC, ORIENT PAPER, TRIVENI ENGG., JINDAL STAINLESS, DALMIA BHARAT, PI INDUSTRIES, HDIL, ZEE ENTERTAINMENT, TV18 BROADCAST and TECH MAHINDRA.

(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, June 11, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 11, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 11, 2018

After gaining 83 points in the previous session, the Indian Equity Markets saw consolidation happening in the Friday’s trade. The Markets opened lower and after testing lows of the day by afternoon, the benchmark NIFTY50 saw remarkable recovery in the second half of the trade. The benchmark Index recouped nearly all of its losses and ended the day flat losing just 0.70 points or 0.01%.

The session saw some good amount of shorts also being added as the NIFTY June futures saw discount widening further by 26-odd points. We expect a modestly positive opening to the trade but in the same breath, also expect some resistance coming in the 10820-10850 zones which is likely to prevent any immediate runaway up move in the NIFTY.

As we step into the fresh week, Monday will see the levels of 10820 and 10850 acting as important resistance area for the Markets. Supports come in at 10710 and 10630 zones.

The Relative Strength Index – RSI on the Daily Chart is 58.3016 and it remains neutral showing no divergence against the price. Daily MACD has turned bullish and it currently trades above its signal line. Apart from a white body, no significant formations were observed on Candles.

If we look at pattern analysis, we see that a fresh trend line resistance is being developed on the Daily Charts. This line marks the highest point of NIFTY at 11171 and then subsequently joins two other lower tops. In the immediate short term, the zone of 10820-10850 works out as the pattern area resistance given this formation.

Overall, though there are no triggers for any outright negativity in the Markets. The global scenario remains stable and we may see NIFTY advancing its gains. However, it would become imperative to become cautious near the 10820-10850 zones as NIFTY may again develop some formidable resistance in this area. Only a meaningful breach of the 10820-10850 zones on the upside would mean resumption of up move for NIFTY. Unless this happens, NIFTY will remain susceptible to corrective actions from higher levels. While maintaining highly stock and sector specific view on the Markets, fresh purchases may be made while guarding profits at higher levels.

STOCKS TO WATCH:

Long positions were seen being added in JP ASSOCIAT, SAIL, BANK OF BARODA, CG POWER, PNB, RELIANCE SUZLON, SUN PHARMA, STATE BANK OF INDIA, TATA MOTORS, TV18 BROADCAST and INDRAPRASTHA GAS.

(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

Friday, June 15, 2018

WEEKLY MARKET OUTLOOK FOR JUN 18 THRU JUN 22, 2018

Thursday, June 14, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 14, 2018

Wednesday, June 13, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 13, 2018

Tuesday, June 12, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 12, 2018

Monday, June 11, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 11, 2018

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