Gemstone Equity Research & Advisory Services

Wednesday, November 15, 2017

MARKET OUTLOOK FOR WEDNESDAY, NOV 15, 2017

MARKET OUTLOOK FOR WEDNESDAY, NOV 15, 2017

The Markets ended in red for the second day in a row on Tuesday as the last hour of the trade saw the benchmark NIFTY50 paring all of its intraday recovery. The Index ended the day with a net loss of 38.35 points or 0.38%. Going into trade on Wednesday, the Markets remain in extremely precarious condition and the levels of 10180-10200 remain extremely critical levels to watch out for. When the Markets traded in a rectangle formation for nearly 3 months, these levels of 10180-10200 acted as a resistance. Now on its way down, these supports are strongly expected to act as supports.

The levels of 10245 and 10270 are expected to act as immediate resistance levels for the Markets. Immediate support for the Markets exists at 10115 which is the 50-DMA level.

The Relative Strength Index – RSI on the Daily Chart is 45.5995 and it has marked a fresh 14-period low which is bearish. However, it does not show any divergence against the price. The Daily MACD stays bearish while trading below its signal line.

The pattern analysis confirms that the NIFTY has achieved a 100% throwback. This means that it has retraced 100% of its up move when it had broken out from 10200 levels. It now trades at those very levels from where it broke out.

Theoretically speaking, the zones of 10180-10200 were serious resistance levels for the Markets when it broke out from there. On its way back, these levels are strongly expected to act as supports. We expect a tepid start to the Markets going into trade on Wednesday. It would be important to note that any significant breach from 10180-10200 zones would increase the possibilities of the Markets testing its 50-DMA level. While adopting highly cautious view on the Markets, we also expect to see isolated stock specific out-performances as well.

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

Tuesday, November 14, 2017

MARKET OUTLOOK FOR TUESDAY, NOV 14, 2017

MARKET OUTLOOK FOR TUESDAY, NOV 14, 2017

The Indian Equity Markets had a weak start to the trading week as the benchmark NIFTY50 ended the day losing 96.80 points or 0.94%. The first half of the session on Monday remained weak and the second half even weaker as the Index rapidly lost ground. With the current Close levels of 10224.95, the Index has given up nearly 90% of the gains it achieved after breaking out from 10200 levels. Going into trade on Tuesday, the levels of 10200 would be critical to watch out for. It would be extremely necessary for the Markets to take support around 10180-10200 zones. This was the major resistance level that the NIFTY had cleared and during this corrective phase, these levels are supposed to act as major support.

The levels of 10290 and 10325 will play out as important resistance levels in event of an up move. The supports come in at 10180 and 10110 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.5363 and it has reached its lowest value in last 14-period which is bearish. RSI does not show any divergence against the price. The Daily MACD is bearish as it is trading below its signal line. An Engulfing Bearish Pattern has emerged. It has emerged after a significant decline and therefore it can mark a reversal.

The pattern analysis shows that the after several weeks of remaining in a trading range in a rectangle formation, the NIFTY achieved a upward breakout from 10200 levels. However, with the Monday’s decline, it has given back nearly 90% of its gains and has suffered a near 100% throwback.

All in all, it is beyond doubt that the level of 10200 would remain a very important level to watch for. The Market is strongly expected to take support at the 10180-10200 zones and attempt a pullback. Any dip below this may see the Markets testing its 50-DMA. However, given the amount of shorts in the system and indicated by some lead indicators, this may be unlikely and the Markets may attempt a technical pullback. Any significant dip below 10200 would warrant an attention and until this happens, we can continue to utilize all the downsides in making stock specific purchases.