Gemstone Equity Research & Advisory Services

Wednesday, February 28, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 28, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 28, 2018

Tuesday’s session remained much on expected lines as the benchmark Index NIFTY consolidated and remained within the fresh congestion area that it has formed. The Index ended the day losing 28.30 points or 0.27% after spending major part of the session in a sideways trajectory heading nowhere. Going into trade on Wednesday, we again expect a positive start to the trade. However, in the same breath, we also expect some consolidation before the NIFTY moves out of the congestion area.

The levels of 10630 and 10665 will play out as immediate resistance area for the Markets. Supports come in at 10510 and 10480 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.6478. This stays neutral showing no divergence of any kind against the price. The Daily MACD is still bearish and it trades below its signal line. However, it continues to move sharply towards reporting a positive crossover. No significant formations were observed on Candles.

While having a look at pattern analysis, it remains evident that the NIFTY has continued to resist to its 50-DMA at Close. It has also resisted to its short term 20-DMA. It is also important to note that the short term 20-DMA has crossed the 50-DMA from above. This may be due to the current consolidation that we have witnessed. This also point towards the likelihood of some more consolidation happening in the Markets.

All in all, it is further important to note that the fresh congestion area that the NIFTY formed after pulling back from the immediate support area of 10276-10310 zones can be the result of either further distribution or likely accumulation. Usually any accumulation pattern is resolved by the price breaking out and moving higher. This will get confirmed only after the NIFTY comfortably moves past the 50-DMA mark. Until this happen, we will see consolidation continuing in the Markets.

The F&O data and chart pattern analysis point towards NIFTY more likely to break out and inch higher but not without some more consolidation. Given this reading, we continue to recommend making select purchases with any available minor corrective move. While keeping overall exposures modest, cautiously positive view is advised for the day.

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, February 27, 2018

MARKET OUTLOOK FOR TUESDAY, FEB 27, 2018

MARKET OUTLOOK FOR TUESDAY, FEB 27, 2018

Indian Equity Markets had a relatively stable and steady session. The benchmark NIFTY enjoyed a positive opening as the session progressed; the NIFTY steadied further and ended the day with a gain of 91.55 points or 0.87%. Technically important thing to note was that the NIFTY managed to open and move past beyond 10500-mark. Therefore, these levels of 10480-10500 zone will act as support area for the immediate short term.

Going to trade on Tuesday, we can expect a quiet start to the Markets. While we approach the 50-DMA mark of 10617, we expect some minor consolidation to happen. Tomorrow’s opening would be crucial it will be important to see if we still keep inching higher or consolidate once again with the level of 10617 acting as resistance.

Tuesday’s trade will see the levels of 10615 and 10650 acting as likely resistance area for the Markets. Supports will come in at 10550 and 10490 mark.

The Relative Strength Index – RSI on the Daily Chart is 50.2279 and it has marked a fresh 14-period high which is bullish. Daily MACD is sharply moving towards positive crossover and we may see this happening in coming days. On the Candles, a rising window occurred. This is usually a gap and often results into continuation of up move.

While having a look at pattern analysis, it is observed that NIFTY has defended and re-validated support of 100-DMA at close levels. Also, it is likely to resist to 50-DMA which stand at 10617. However, over previous days, NIFTY has formed a small congestion zone.

Overall, though some consolidation is likely, but in all probabilities NIFTY has formed a base in the support area zone of 10276-10300 and is likely to inch higher from current levels. The congestion zone that is seen looks like an accumulation. It is likely that post some minor consolidation, if any, we will see the NIFTY inching higher, moving out of this congestion area. This will result into confirmation of the current support levels. We recommend approaching the Markets with a highly stock specific view and maintain a cautiously positive view on the Markets for the day.

STOCKS TO WATCH:

Fresh long positions were seen being created in RCOM, TV18 BROADCAST, IDEA, JSW STEEL, SOUTH BANK, RNAVAL, ASHOK LEYLAND, MOTHERSON SUMI, HDIL, HIND ZINC and L&TFH.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)