Dr.Bhuvanagiri Amaranatha Sastry
Astro Technical Analyst
Saketha Consultants, Hyderabad
Outlook for Next Week :: 31.03.2014 to 04.04.2014
Planetary Position :: During the current week Moon would be transiting from Revathi in Pisces to Rohini in Taurus. Sun transits in Revathi in Pisces . . Mercury transits in Poorvabhadra in Aquarius and Pisces . Mars transits in Chitta constellation in Virgo and has been in Retrograde motion from 1st March till 20th May. Saturn too in Retrograde motion from 2nd March till 20th July and presently in Visakha constellation in Gemini navamsa. Jupiter transits in Aardra constellation and in Pisces Navamsa during the week. Nifty’s range between 28th and 31st March would be the reference range for the next Three weeks. Nifty can be econsidered bullish above the High and bearish below the Low. Further, global markets can be expected to correct in Second half of April and whether our markets would follow is to be seen?
NIFTY :: 6696 (+201)
“When money talks, listen with interest.. Don’t argue with Money”. This is what is going on in stock market now. Market is controlled by Two levers ie., Fear and Greed. It is the turn of Greed now. However, it is not baseless,as it always appears, as markets are experiencing a preelection rally hoping a stable, pro market Government.
After Two weeks of sideway movements Nifty rallied sharply last week and closed with a gain of more than 3% and a clear shift was seen in sectors as sofar performing sectors IT and Pharma took a back seat and Cyclicals and Financials in the forefront. However, it is only the beginning and a lot of upside is possible if global cues improve and we have a proactive Government at the Centre. However, as Nifty had gone up without a meaningful correction, the same is to be expected either in April or May. But sooner the better it is as any meaningful correction could give an opportunity to enter. However, market’s nature is to surprise and this time could be no exception. Based on current market movement, sector specific / stock specific approach is more relevant for swing traders. With the recent rise, Nifty has clearly come out of the trading range and 200 DMA could become a strong base even from long term point of view. Technically, though the trend is firm and bullish, caution is advised at higher levels as and retracement is to be expected. .However, as Nifty has resumed uptrend after Two weeks of sideways movement, further rise for another Two weeks can be expected before a meaningful correction.
Nifty had traded in a narrow range last week and a weekly breakout would happen above 6600 and break down would take place below 6450. Bank Nifty (12785) is on the verge of a powerful breakout, which if happens would give an excellent buying opportunity in Bank stocks which could rally much higher. IT Index(9345) has resistance at 9750 and support at 9100 for next week. IF 9100 level is broken , the fall can be steeper. Breakout on Bank Nifty and Break down in IT index could have a compensating effect on Nifty. Strengthening Rupee is also adding to the woes of export oriented sectors suchas IT and Pharma.
Nifty continues to be above 200 DMA and 50 DMA too is above 200 DMA suggesting that the long term bullish trend is intact. Bank Nifty too exhibited strength last week and is above 200 DMA Energy major, Scrip rotation has become the order of the day. Big event of 2014 is Loksabha Elections and the outcome would dictate the future trend. As of now, market expects NDA to return to power and carry the development agenda and stock market discounts future in advance. Even with the recent rise, Nifty is quoting at a PE of 18.75 , which is only 4% above the long term PE of 18. Hence, further upside (upto 7500 to 8000) is possible in case a stable and performing Government returns to power at the centre as earnings go up over the time in an inflation ridden economy.
Further, Nifty has been trading in a range of 4600 to 6300 for more than 4 years and a powerful breakout appears to be unfolding. (expected post election results but the liquidity is in a hurry to complete the task as stock market usually ahead by about Six months. Hence strong long term support would be around 6000 level.
For Short term, the stop loss is 6600, and for Medium term, stop loss is 6000. For the current week, Nifty spot is expected to continue with the uptrend as long as it holds above the support level of 6600., Breakout level for the week is 6750 and break down level is 6465. As breakdown level is far away and unlikely to be broken considering the present euphoria, if break out level of 6750 is broken further upside can be expected.
For the coming week, Nifty spot is expected to face resistance at
6780, 6860, 6860 and find support at 6615, 6530, 6450.
6780, 6860, 6860 and find support at 6615, 6530, 6450.
Nifty in short term bullishness would come out of the same only if it closes below 6600, .
Advice for Traders :: As Nifty has broken out after Two weeks of consolidation, further upside is possible for another One or Two weeks before a meaningful retracement. Hence, Buy on dips as long as it holds above 6600 in first half of the week and above 6660 in Second half of the week. Further, traders may track scrip wise / sectorwise movement as all sectors do not move in tandem. However, entire April month might not remain bullish and correction could set in Second half of the month.
GANN Natural levels....
6281,6361, 6441 , 6521, 6628, 6769,6913