Gemstone Equity Research & Advisory Services

Wednesday, May 2, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 02, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 02, 2018

Broadly speaking, the Indian Equity Markets continued with its up move and stepped into the new week on a buoyant note. Though the Markets remained in a capped range, the benchmark Index NIFTY50 ended the day with gains of 47.05 points or 0.44%. Tuesday was a trading holiday on account of Maharashtra Day. Indian Markets will enter into trade on Wednesday, therefore, after a day or slumber.

Speaking from a global perspective, the day in between has remained largely uneventful. US Markets closed with a modest loss while Europe has traded with modest gains. Going into trade on Wednesday, we expect a quiet start to the session and we can see Markets showing modest strength in the initial trade with some possibilities of consolidation happening again.

We will see the levels of 10750 and 10805 acting as immediate resistance. Supports, on the other hand, will come in at 10675 and 10620 zones.

Relative Strength Index –RSI on the Daily Chart is 69.97. It has marked yet another 14-period high. This indicates continuation of buoyant undercurrent. RSI remains neutral showing no divergence from the price. The Daily MACD continues to trade bullish, above its signal line. On the Candles, a white body occurred. This implies continuation of the present up move. Apart from this, no significant formations were observed on Candles.

While having a close look at pattern analysis, it is evident that the NIFTY deliberated at the upper range of the rectangle formation for sometime before breaking out. Though this remains prone to some throwbacks, we can clearly see a breakout taking place above the 10500 mark.

Overall, there are no major triggers that would influence any sharp movement in the Markets on either side on Wednesday. We will see NIFTY attempting to inch higher. However, the Markets are very near to being overbought and this would mean that it remains prone to some consolidation once again at higher levels. The Bollinger bands are seen getting wider-than-its normal range. Also, the volatility is seen at its lowest levels seen in the recent past. All this may push the Markets under some consolidation and limit them in a range. Stock specific action will dominate the session. We recommend remaining highly stock specific while guarding profits at higher levels.

STOCKS TO WATCH:

Good technical set up is observed in stocks like First Source, IRB Infra, VEDANTA, NATIONAL ALUMINUM, CANARA BANK, INDIAN OIL, JET AIRWAYS, TATA STEEL, NCC, CG POWER and BHEL.

(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

Monday, April 30, 2018

MARKET OUTLOOK FOR MONDAY,APR 30, 2018

MARKET OUTLOOK FOR MONDAY,APR 30, 2018

Indian Equity Markets followed up positive closing of the expiry day on Friday. The Markets saw a gap up opening with a renewed vigor, sustained it all throughout the day and the NIFTY ended the day with gains of 74.50 points or 0.70%. We enter into a truncated week with Tuesday being a trading holiday. Barring some more consolidation, we expect this up move to spill over to coming week as well.

Though we see some possibilities once again of consolidation happening at higher levels, we expect a quiet to modestly positive start to the trade on Monday. Markets are likely to see this expansion happening until its next logical targets of 10750-10800 zones. However, this is less likely to happen without any intermittent consolidation spells.

Monday will see the levels of 10730 and 10765 working out as immediate resistance levels for the Markets. Supports exist at 10660 and 10610 zones.

The Relative Strength Index – RSI on the Daily Chart is 67.7660. RSI has marked a fresh 14-period high which is bullish. It remains neutral and shows no divergence against the price. The Daily MACD remains bullish trading above its signal line. On the Candles, a rising window occurred. This is essentially a gap and usually sees a continuation of up move.

Pattern analysis shows that after resisting to a important pattern resistance area for couple of days, the NIFTY has attempted to break out of the rectangle formation. This has happened as a breakaway gap and we are all likely to see continuation of this up move.

Broadly speaking, given the current set up, we might see this breakout resulting into a short phase of fresh up move, we also cannot discount the possibility of small throw backs occurring. Traders and Investors are required to mitigate these risks of throwbacks happening in this otherwise bullish environment. These can be done with choosing stocks very selectively, rotating sectors and remaining vigilant at higher levels. Overall, positive outlook is advised for the day.