WEEKLY ASTRO GUIDE

CAUTION @ HIGHER/LOWER LEVELS

Inputs by

Dr.Bhuvanagiri Amaranatha Sastry

Astro Technical Analyst

Saketha Consultants, Hyderabad

sastry.saaketa@gmail.com

09848014561

http://www.saaketa.com/AstroTechnicals.aspx

General outlook for the week (05.05.2014 to 09.05.2014) ::

Planetary Position ::  During the current week Moon would be transiting  from Punarvasu  in Gemini to Pubba  in Leo.  Sun transits in Bharani in Aries . .  Mercury transits  in Krittika  in  Aries. Mars  transits in  Hastha  constellation in Virgo  and has been in  Retrograde motion from 1^st March till 20^th May. Saturn too in  Retrograde motion from 2^nd March till 20^th July and presently in  Visakha  constellation in  Taurus navamsa.   Jupiter transits in Punarvasu  in Aries  Navamsa.   Nifty’s monthly astro range during 25^th April to 28^th April was 6870 and 6750 and is presently as it is below the low of the range and the targets are 6630 and 6480 as long as it is below 6750 or does not go above 6870. PSU Bank stocks can be expected to do well in the first half of the week. As Saturn and Mars are close to earth, lot of disturbances  can be expected. Mercury’s acceleration and going away from Sun too could dampen market sentiment. Caution is  to be expected. Whether the recent top would be crossed or not before or election results is to be closely watched?

Nifty Outlook for Next Week :: 05.05.2014 to 09.05.2014 (Further Correction only below 6625)…  

NIFTY :: 6695 (-88)  

After Two weeks of sideways movement, Nifty corrected last week to close with a loss of about 1.25%. Market has been cautious ahead of election results and experienced a mild correction and can be considered as “Calm before the Storm”. Historically, May (during Even year) has been bearish and a sizeable correction can be expected. However, current year could be different considering a major event for India. Current week (5.5.14 to 9.5.14) is the penultimate week before declaration of results. 13^th and 16^th are quite important as exit poll results and poll results would be out on those days. Considering some uncertainty over the clear majority for NDA and extent of short fall, market is cautious ahead of results. However, much needed correction is coming in this form.  Nifty movement was nervous as Nifty had fallen on all the Four days of the week and technically, becomes further weak only if it closes below 6650. Hence, pullback can be expected from around 6650 level. Market participants should fasten their seat belts for a bumpy ride ahead. Market’s nature is to discount future events and to surprise too. Hence market participants should be prepared for the most unexpected. However, primary trend is up and any correction would be healthy and could be utilized to enter in the direction of the primary trend. Primary trend could change only if an unstable Government with weak leadership takes charge at the centre. However, as market has been going up for the last Seven months hoping for a stable Government, the same could be expected. (However, market was proved incorrect on the last Two occasions). While Investors can accumulate quality stocks on SIP basis, traders need to be highly cautious and traders may utilize Options route to hedge their positions. Sectoral rotation has become order of the day and different sectors should be tracked to discern individual stock trends.   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 18.72 , which is only 4% 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 6200 level and Medium term support is 6450 and for Long term  is 6200.   For the current week, Last week’s range is to kept as reference as strong resistance  could be expected around 6800 and support around 6625.  Breakout level for the week is 6800 and break down level is 6625. If breakout is achieved, Buy on Decline  policy may be followed and vice versa.

For the coming week, Nifty spot is expected to face resistance at
6780,  6860, 6940 and find support at 6615, 6530, 6450.

Nifty is in short term bearishness and a close below 6625 would reinforce bearishness while a close above 6800 would bring back bullishness.

Advice for Traders :: Above breakout and break down levels may be kept as reference and a close below 6625 only would weaken the sentiment further and reinforce bearishness. On the other hand, caution is to be exercised at higher levels and close above 6800 /6825  only would bring back bullishness and if it hovers in between the above levels, it could be considered neutral with bearish bias. High risk traders can consider long positions in case if maintains above weekly open with the 6625 as stop loss (on close basis).

WD Gann’s
natural numbers which would act as natural support and resistance are
, :  ,  , 6441 , 6521, 6628, 6769,6913 during the week.

Further , Weekly Open level is very important for the entire week.
Short positions may be avoided as long as it maintains / closes above
Weekly open and vice versa