Gemstone Equity Research & Advisory Services: 6/17/18

Saturday, June 23, 2018

WEEKLY MARKET OUTLOOK FOR JUN 25 THRU JUN 29, 2018

WEEKLY MARKET OUTLOOK FOR JUN 25 THRU JUN 29, 2018

In our previous Weekly note, we had mentioned about the critical importance of the 10820-10850 zones and likelihood of volatility creeping into the Markets. Much on the expected lines, NIFTY struggled throughout the week to move past this resistance zone of 10820-10850 levels but still ended in between these critical levels. In the meantime, all throughout the week, it continued to resist to this important pattern resistance area. NIFTY ended the week absolutely flat with negligible gains of 4.15 points or 0.04% on weekly basis.

We approach expiry in the coming week and we expect the week to remain dominated with rollover centric activities. Though the NIFTY has fiercely attempted to move past this the resistance zone, it still rules below the 10850-mark. This level, therefore, remains critical for the coming week as well. It would be important for NIFTY to breach this level on the upside for any meaningful up move. Unless this happens, it remains vulnerable to slip into some more consolidation.

Coming week will see the levels of 10890 and 10985 as immediate resistance area. Supports come in lower at 10760 and 10675 zones.

The Relative Strength Index – RSI on the Weekly Chart is 60.8638. It shows no failure swings but shows a mild bearish divergence. This is because RSI has not formed a fresh 14-period high while NIFTY reported a fresh 14-period closing high. However, it is seen attempting to break out of a pattern. Weekly MACD stays bullish while trading above its signal line. A pattern resembling to a Hanging Man occurred on NIFTY. Since this has occurred after a pullback, we might see some stalling of up move in NIFTY. However, this needs confirmation.

Overall, NIFTY still is yet to move past the pattern resistance. This pattern resistance comes in form of a falling trend line which joins the high of 11170 with the subsequent lower tops. Though likelihood of NIFTY breaking out above this pattern resistance is quite high, but until it actually moves past and closes above 10850-mark, we cannot take NIFTY as completely out of the woods. We recommend avoiding shorts and keep overall exposure at modest levels. While extremely selective buying may be done, a cautious approach with a tinge of optimism is what is advised for the coming week. Before taking any major directional call, a confirmation to this attempt of moving past the pattern resistance should be awaited.

A study of Relative Rotation Graphs – shows that BANKNIFTY has continued to relatively outperform the general Markets and the PSU Bank pack has continued to further improve its relative momentum. The coming week will see relatively better performance from the BANK NIFTY, PSU Banks to some extent. The Financial Services pack along with Services sector is likely to relatively outperform. Stock specific performance is also likely from FMCG Pack. Though it remains in leading quadrant, it is seen losing its momentum. No improvement on the momentum front is seen in broader Indices like CNX100, 200 and 500 along with NIFTY JR., and NIFTY MIDCAP universe. REALTY might see some individual performances. No major show is expected from AUTO and METAL Pack. PHARMA is likely to remain strong and improve its relative out performance.

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 22, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 22, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 22, 2018

The Indian Equity Markets had a disappointing session on Thursday as it opened on a mildly positive note but spent most part of the session in an extremely narrow range. The Index slipped further in the last hour of the trade and ended the day with modest losses of 30.95 points or 0.29%.

The session remained without any directional bias but NIFTY continued to remain in its present pattern and also continued to resist to its present pattern resistance zones. As we approach Friday, we once again expect a quiet start to the day but also expect the pattern resistance zone of 10820-10850 to remain very much in force. NIFTY has to rule out any exceptional move unless these levels are breached on the upside.

Friday will see the zones of 10810 and 10830 playing out as immediate resistance area for the Markets. Supports come in at 10720 and 10660 levels.

The Relative Strength Index – RSI on the Daily Chart is 52.1682 and it stays neutral showing no divergence against the price. The Daily MACD stays bearish as it trades below its signal line. On the Candles, a big black candle occurred. In the present context, it remains important as it occurred near the pattern resistance area for the NIFTY. This reinforces credibility of the pattern resistance to which NIFTY resisted.

Pattern analysis shows that NIFTY continues to remain in a broad symmetrical triangle pattern and is moving towards its apex with each passing day. On the upside, the NIFTY continues to resist to the falling trend line which joins the high of 11171 to the subsequent falling tops

Overall, NIFTY is still not out of the woods even if it continues to move in a narrow range. It would be critically important for the NIFTY to resolve the present pattern with a move on either side. Unless this happens, the zones of 10820-10850 still continue to remain critical and important pattern resistance area for the Markets. Unless a resolution to this pattern is achieved, we recommend remaining moderate on the overall exposures and continue to vigilantly guard profits at higher levels.

STOCKS TO WATCH:

Selective longs were seen being added in ICICI BANK, TATA MOTORS, HDFC, RELIANCE, SUN TV, INFOSYS, BHEL, INDIAN OIL, HIND PETRO, BERGER PAINT, CG POWER, TATA POWER, ARVIND, LIC HOUSING, ENGINEERS INDIA, CASTROL and ZEE ENTERTAINMENT.

(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)

Thursday, June 21, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 21, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 21, 2018

Markets saw a modest technical pullback as the benchmark Index NIFTY ended the day with net gains of 61.60 points or 0.58%. A mildly positive start to the trade strengthened further and this resulted into the Markets pulling back and ending with gains. The up move was led by short covering but it remained important as the NIFTY held on to its short term support of 20-DMA.

We expect this mild up tick that we witnessed to percolate into Thursday’s trade as well. A modestly positive and quiet opening is expected. However, it should not be ignored that the NIFTY still continues to remain in a broad symmetrical triangle formation and will continue to face pattern resistance of the falling trend line joining the lower tops.

Thursday will see the levels of 10810 and 10840 playing out as important resistance zone for the Markets. Support comes in at 10750 and 10710 levels.

The Relative Strength Index – RSI on the Daily Chart is 54.6358 and it stays neutral showing no divergence against the prices. The Daily MACD has reported a negative crossover and it has turned bearish while it trades below its signal line. On the Candles, a pattern resembling a Bullish Harami has emerged. It remains significant as it has occurred after a corrective move. It also remains significant as it has arisen from a combination of black/white candle with the white body remaining completely encompassed by the preceding black body.

Pattern analysis shows that NIFTY still continues to remain in a broad symmetrical triangle pattern and remains susceptible to resistance coming in from the falling trend line ahead which joins subsequent lower tops from 11170 zones.

Overall, as of today, NIFTY has validated its short term support area of 20-DMA and this is followed by the 50-DMA which remains in its close vicinity. We expect the coming session to remain dominated with stock specific activities. With the NIFTY continuing to remain under a large pattern formation, it would be prudent to continue to protect profits at higher levels until NIFTY resolves the present pattern formation on either side. While remaining highly stock specific, cautious view is advised for the day.

STOCKS TO WATCH:

Relative resilient technical set up is observed in stocks like CGPOWER, ADANI POWER, YES BANK, TATA MOTORS, TATA STEEL, RELIANCE, RELIANCE CAPITAL, NHPC, EXIDE, TATA POWER and M&M FINANCIAL.

(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 20, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 20, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 20, 2018

Tuesday’s session saw the Indian Equity Markets remaining gripped in a downward trajectory as the benchmark Index NIFTY50 slipped further and ended the day losing 89.40 points or 0.83%. The Markets remained in falling trajectory throughout the session and at no point of time did it make any attempt to recover.

As we approach Wednesday, there are mild chances that the Markets attempts to stabilize as it currently rests on its short term 20-DMA. However, there are higher chances that we may see some amount of weakness persisting in the Markets. In anyway, no runaway technical pullback is expected from the Markets. The opening is expected to be tepid.

We are likely to see the levels of 10745 and 10820 acting as immediate resistance area for the Markets. Supports come in at 10690 and 10650 zones.

The Relative Strength Index –RSI on the Daily Chart is 50.2903 and it remains neutral showing no divergence against the price. The Daily MACD still remains bullish while trading above its signal line. However, it is seen narrowing its trajectory. On the Candles, a big black body occurred. This reinforces the credibility of the resistance area of the 10820-10850 zones.

Pattern analysis shows that NIFTY is currently forming a large symmetrical triangle formation as evident on the Daily Charts. The NIFTY is resisting to the falling trend line of this formation drawn from 11170 which joins the subsequent lower tops.

Overall, it is just that NIFTY has rested on its short term 20-DMA, we expect some stability to come in. However, with lack of any major trigger and with the present technical structure, we might continue to see tepid behavior from the Markets. The important support now come in the form of 50-DMA which remain in close vicinity at 10653. This is likely to act as important support at Close levels. Overall, in any case, we do not expect any runaway technical pullback to occur. We expect Markets to remain range bound and expect the session remaining highly stock specific. While keeping overall exposures at modest levels, cautious outlook is advised for the day.

STOCKS TO WATCH:

Short positions were seen being added in SOUTH BANK, ICICI BANK, BANK INDIA, ICICI BANK, ASHOK LEYLAND, RCOM, INDIA CEMENTS, SAIL, BANK OF BARODA, CG POWER, FEDERAL BANK and TATA STEEL.

(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 19, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 19, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 19, 2018

The Markets spent nearly entire session on Monday in a much capped and narrow range in which NIFTY ended the day with minor losses losing 17.85 points or 0.17%. Given the fact that the session remained extremely range bound, important thing to note was that NIFTY’s struggle with the zones of 10820-10850 continued and the Markets failed to move past this important pattern resistance.

As we step into Tuesday’s trade, we feel that some weakness might persist and NIFTY might remain under modest pressure but the downsides are likely to remain limited. On the upper side, the struggle with the zones of 10820-10850 is likely to continue. Behavior of the Markets vis-à-vis this level is extremely important to watch for in coming days.

Tuesday will continue to see the levels of 10850 and 10895 continuing to act as important resistance area. Supports come in at 10765 and 10710 zones.

The Relative Strength Index – RSI on the Daily Chart is 57.7446. RSI continues to remain neutral showing no divergence to the price. The Daily MACD stays bullish while trading above its signal line. A small black body occurred on Candles. In the present context, it holds no significance.

Pattern analysis shows that NIFTY continues to resist to the falling trend line resistance area of 10820-10850 zones. Breach on the upside of these levels is necessary for any meaningful up move to occur.

Overall, while NIFTY continues to resist to the falling trend line that joins the high of 11170 to the subsequent lower tops, it also continues to show some inherent strength by consolidating around the resistance area without showing any major declines. The present amount of shorts in the system is likely to keep the overall downsides limited. However, in the same breath, unless NIFTY moves past 10820-10850 zones and sustain above that, it will remain vulnerable to pressure from higher levels and some prolonged consolidation. We recommend remaining modest on exposures, preserve cash and make select purchases with each available opportunity.

STOCKS TO WATCH:

Long positions were seen being added in IDEA, EQUITAS, SAIL, ADANI ENTERPRISES, POWER GRID, BHEL, BATAINDIA, TATA MOTORS, NBCC, UJJIVAN, ICICI BANK, TVS MOTORS, EXIDE and ASIAN PAINT.

(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 18, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 18, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 18, 2018

Consolidation continued in Friday’s trade as the benchmark Index ended the day gaining 9.65 points or 0.09%. The Markets saw a modestly positive start but later slipped under some corrective pressure. However, NIFTY recovered 60-points from the low point of the day before ending with modest gains.

As we step into fresh week we expect a flat start to the trade. The NIFTY has been consolidating near its pattern resistance area. For tomorrow and for coming days, it would be imperative for the Markets to move past 10820-10850 zones for resumption of any meaningful up move.

Monday is likely to see the levels of 10850 and 10895 acting as immediate resistance area. Supports come in at 10765 and 10710 zones.

The Relative Strength Index – RSI on the Daily Chart is 59.3764 and it remains neutral showing no divergence against the price. The Daily MACD stays bullish while trading above its signal line. On the Candles, a candle with a long lower shadow occurred. In the present context, it holds little significance as it has occurred during an upside. However, since it has also occurred after some consolidation, it offers mild possibilities of fresh attempt by NIFTY for a resumed up move.

Going by pattern analysis, NIFTY has continued to resist to the falling trend line that begins from 11170 and then subsequently joins the lower tops. It would be critically important for NIFTY to move past the 10820-10850 zone for resumption of any meaningful up move.

Overall, the undercurrent continues to remain buoyant and the F&O data also suggests NIFTY has some more steam left and it may attempt to move past the pattern resistance area near which it is currently consolidating. However, until the levels of 10820-10850 are breached on the upside, we continue to recommend caution at higher levels and guard profits with each up move. Overall, positive caution is advised for the day.

STOCKS TO WATCH:

Long positions were seen being added in RELIANCE, WIPRO, INFOSYS, BAJAJ FINANCE, AURO PHARMA, BERGER PAINTS, TCS, KOTAK BANK, TORRENT PHARMA, TCS, GRANULES and DR REDDY.

(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 23, 2018

WEEKLY MARKET OUTLOOK FOR JUN 25 THRU JUN 29, 2018

Friday, June 22, 2018

MARKET OUTLOOK FOR FRIDAY,JUNE 22, 2018

Thursday, June 21, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 21, 2018

Wednesday, June 20, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 20, 2018

Tuesday, June 19, 2018

MARKET OUTLOOK FOR TUESDAY,JUNE 19, 2018

Monday, June 18, 2018

MARKET OUTLOOK FOR MONDAY,JUNE 18, 2018

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