General outlook for the week (21.04.2014 to 25.04.2014) ::

Planetary Position ::  During the current week Moon would be transiting  from Poorvashadha  in Sagittarius to Sathabhisham  in Aquarius. Sun transits in Aswini in Aries . . Mercury transits  in Aswini  in  Aries. Mars  transits in  Hastha  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 and moves to Punarvasu on 24th April.   Nifty’s range on Friday and next Monday would determine the reference range for the next Three weeks. While placement / distance between inner planets i.e., Sun, Mercury and venus suggests suggests short term bullishness, hard aspects among outer planets indicates wild movements with bearish bias. Further, as election outcome draws closer, domestic sentiment becomes more upbeat. In view of the above, there is a tough fight between Bulls and Bears with a clear edge for Bulls.  Further, global markets can be expected to correct during the coming week  and whether our markets would follow is to be seen?

NIFTY :: 6779 (+3)  

Nifty closed flat for the week but closed at the upper end of the weekly range suggesting further upmove. It is sentiment which plays an important role in market movements and sentiment is upbeat, negative news are ignored and vice versa. Individual scrip movement would be influenced by Quarterly results and Bias is clearly bullish and any reasonable fall should be utilized for Buying for Short / Medium term. However, the upbeat sentiment is on account pre-election rally and a precursor to a stable and performing Government. However, it has run up too much with out a reasonable correction / retracement  which is a prerequisite for a healthy market. It is to be seen whether a small correction would come before results or a big correction after a Big move after elections is to be seen? While Investors can accumulate quality stocks on SIP basis, traders need to be highly cautious and traders may utilize Options router to hedge their positions. Sectoral rotation has become order of the day and different sectors should be tracked to discern individual trends. Market’s nature is to surprise and this time could be no exception. 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.   Investors need to accumulate quality stocks while traders need to be ever vigilant. However, any sharp fall for any reason would be an opportunity to Buy for Medium / Long term.

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  is above 200 DMA.  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 19 , which is only 5.5% above the long term PE multiple  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 and further upbeat sentiment can fuel the indices as market are usually irrational and emotional.
Further, Nifty had 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 is  usually ahead by about  Six months. Hence strong long term support would be around 6100 level.  
For Short term,  the stop loss is 6700 (on close basis), and for Medium term, stop loss is 6100.   For the current week, Last week’s range is to kept as reference as strong resistance and support could be expected around 6850 and support around 6650.  Breakout level for the week is 6840 and break down level is 6625. If breakout is achieved, Buy on Decline  policy may be followed and vice versa. There is holiday during the week (Thursday) on account polling day in Mumbai.

For the coming week, Nifty spot is expected to face resistance at
6860,  6940, 7025 and find support at 6695, 6610, 6530.

Nifty is in neutral zone with bullish bias and a close above 6815 would bring back bullishness while a close below 6700 would reinforce bearishness. However, it is a case of Buy and Buy further  on Decline for Medium term.

Advice for Traders :: Nifty has been moving in a narrow range for the last Three weeks and the bias is Bullish as it closed at the upper end for the last week. A break out above recent high would reinforce bullishness and Nifty could go up further. However, it is better to track individual scrips / sectors as there is reasonable divergence among different sectors. Being last week of Derivative series, scrip specific movements are most likely. While above is the advice for traders, investors can utilize any decent correction to “Buy” in view of the promise it holds for medium / long term.
WD Gann’s
natural numbers which would act as natural support and resistance are
, :  ,  ,6281,6361, 6441 , 6521, 6628, 6769,6913 during the week.


Popular posts from this blog