Gemstone Equity Research & Advisory Services

Wednesday, June 27, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 28, 2018

MARKET OUTLOOK FOR THURSDAY,JUNE 28, 2018

Equity Markets had a thoroughly disappointing session on Wednesday as the NIFTY slipped after witnessing selling pressure and ended the day with a net loss of 97.75 points or 0.91%. The grim part of the story was that the NIFTY showed likely breakdown from a pattern formation which shows the NIFTY right into its apex and subsequently giving up.

Thursday’s opening levels and trajectory post opening would be extremely crucial for the Markets. If the NIFTY does not show any pullback on Thursday, it has increased its chances of progressing ahead with a breakdown and confirming it. In the process, in event of any meaningful pullback, it will also increase its chances of testing its 100-DMA which stand at 10533. The coming days remain highly crucial from such many angles.

Thursday is also expiry of the current derivative series and given the shorts in the system, we also stare at a possible pullback. However, the broader pattern formation forces us to sit with fingers crossed. On the higher side, the levels of 10720 and 10760 will resist the pullback, if any, while the supports will come in much lower at 10640 and 10590 zones.

The Daily RSI stand at 46.1609 and it has marked its 14-period low which is bearish. MACD stays bearish while it trades below its signal line. On the Candles, a big white body occurred. It remains significant as it emerged near the pattern area resistance of the falling trend line and lends further credibility to the resistance.

Overall, we stare at a two way move on the NIFTY. On one hand, there are remote chances of a technical pullback happening if the NIFTY validates the 50-DMA support at Close. NIFTY has closed a notch below this. Also, the high amounts of shorts that exist in the system provide a ray of hope for a technical pullback given the expiry day. On the other hand, NIFTY stares at a possible breakdown from the large symmetrical triangle formation which would make it vulnerable to test 100-DMA. We recommend highly cautious approach to the Markets and advice staying away from creating any major exposures.

STOCKS TO WATCH:

Fresh shorts were seen in the stocks like IDEA, SAIL, IDFC, IDFC BANK, ICICI BANK, ITC, DHFL, PFC, TV18 BROADCAST, ASHOK LEYLAND and NTPC.

(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, June 26, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 27, 2018

MARKET OUTLOOK FOR WEDNESDAY,JUNE 27, 2018

The Indian Equity Markets headed nowhere as the benchmark Index spent the entire session in a range bound trade. The Index oscillated in a narrow range and settled the day with nominal gains of 6.70 points or 0.06%.

In a way, NIFTY displayed great resilience to the overnight global weakness. However, it is important to note that it has continued to resist to the falling trend line and has not yet achieved any meaningful directional bias. It also continues to remain in a broad symmetrical triangle formation as evident from the Charts.

We can expect a stable opening on Wednesday but it is likely that either on Wednesday or in coming days, NIFTY is set to resolve the current pattern formation with a sharp move on either side.

We expect the levels of 10820 and 10850 to act as immediate resistance levels. Supports come in at 10740 and 10680 zones.

The Relative Strength Index – RSI on the Daily Chart is 53.3053. It remains neutral showing no divergence against the price. The Daily MACD is bearish as it trades below its signal line. Apart from a small white body that occurred, no significant formations were observed on Candles.

Going by pattern analysis, NIFTY still remains within a broad symmetrical triangle formation and is moving towards its apex. It has not achieved any directional breakout as of now and is treading near its 20-DMA. The resolution of this pattern with a sharp directional move on either side is imminent in coming days.

In absence of any breakout, we still need to approach the Markets with caution. It is a positive sign that despite global weakness, NIFTY has demonstrated internal strength by continuing to consolidate and not showing any draw downs. However, with expiry lurking around us and with NIFTY still struggling with a major pattern resistance, it would be prudent to stay with more liquidity and maintain light exposures while remaining highly stock specific in the approach to the Markets.