Gemstone Equity Research & Advisory Services

Wednesday, May 9, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 09, 2018

MARKET OUTLOOK FOR WEDNESDAY,MAY 09, 2018

Following a strong surge on Monday, Tuesday’s session failed to see any follow up move and the Markets once again faced consolidation on expected lines. The NIFTY failed to move past the 10785-mark and chose to consolidate in a range. The indexes headed nowhere and continued to oscillate in a given capped range. The NIFTY ended on a flat note gaining 2.30 points or 0.02%.

We keep our analysis on similar lines for Wednesday’s trade. We expect the Wednesday’s trade to begin on a quiet note and in all likelihood; we will see the Markets continuing with consolidation. We will continue to see the levels of 10785 continuing to act as immediate resistance area for the Markets.

We expect the levels of 10755 and 10785 to act as immediate resistance levels. Supports come in at 10690 and 10660 zones.

The Relative Strength Index – RSI on the Daily Chart is 63.7060. It continues to remain neutral showing no divergence against the price. Daily MACD still stays positive while trading above its signal line. No significant formations were observed on Candles.

The pattern analysis of the Daily Charts also does not present any different picture. The NIFTY has broken out from a broad rectangle formation, tested highs at 10785 and then has shown a throwback followed by some consolidation once again.

Overall, the current structure of the Charts has established the levels of 10785 as the immediate short term resistance level for the Markets. For any sustainable up move to emerge, NIFTY will have to move past the 10785-mark. Unless that happens, a sustainable resumption of up move will continue to elude us exposing Markets to some more consolidation in a capped range. We will see stock specific performances dominating the trade landscape. Market breadth will also be important to be watched. We recommend keeping exposures moderate and adopt stock specific approach for the day.

STOCKS TO WATCH:

Favorable technical set up is seen in stocks like EXIDE INDUSTRIES, BANK OF BARODA, IDEA, L&T FINANCE, FIRST SOURCE SOLUTIONS, DLF, and RELIANCE INDUSTRIES.

(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

Tuesday, May 8, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 08, 2018

MARKET OUTLOOK FOR TUESDAY,MAY 08, 2018

Monday’s session saw a buoyant start to the Week. The Markets saw a opening in lines with expectations and traded in a range in the first half of the session with modest gains. We saw strength coming in especially in the second half. The benchmark Index NIFTY50 got further fortified and ended the day with decent gains of 97.25 points or 0.92%.

The Markets have resumed its up move after a brief corrective spell after testing the immediate past high level of 10784. As we walk into Tuesday’s trade, we see the upbeat sentiment persisting. The Markets are likely to enjoy a positive start to the day. This being said, Markets still face chances of consolidation at higher levels and the levels of 10784 will remain important levels to watch for. Markets are still theoretically expected to face resistance at those levels if we speak of immediate short term.

The levels of 10765 and 10790 will act as immediate resistance area for the Markets. Supports come in at 10675 and 10630 zones.

The Relative Strength Index – RSI on the Daily Chart is 63.5806 and it remains neutral showing no divergence against the price. The Daily MACD stays bullish while trading above its signal line.

Pattern analysis reveals that after achieving a breakout from the broad rectangle zone, the NIFTY suffered a classical throwback and suffered a minor corrective decline. After a brief consolidation, NIFTY has resumed its up move. Key would be to see if it faces resistance once again at 10784 levels.

Overall, a modestly positive, but quiet start is expected in the trade on Tuesday. It is advised not to attempt to create shorts at higher levels. We will continue to see stock specific performance. The undercurrent remains very much buoyant. The levels of 10784 will be important to be watched as the Markets may face resistance at higher levels. Even if some resistance is found at higher levels, the Markets will see more consolidation once again in a given range than outright correction. We continue recommend making stock specific purchases with any decline that the Markets offer. While continuing to guard profits at higher levels, neutral to positive outlook is advised for the day.