Planetary Position ::  
During the current week
Moon would be transiting  from Anuradha in Scorpio  to Moola  in Sagittarius.
Sun transits in Hastha  in Virgo .
Mercury transits  in Swathi   in  Libra.
Venus transits in Uttara in  Virgo.
Mars  transits in   Anuradha  and Jyeshta constellations in Scorpio .  
Saturn transits in Visakha constellation in Libra and in Taurus Navamsa .  
Jupiter transits in Aslesha constellation in Cancer and in Capricorn navamsa ..
Mars trine Jupiter and Uranus during the week denotes bountiful activity in markets. Nifty could not breach the higher end of monthly astro range of 8180.

Nifty Outlook for Next Week :: (29.09.2014 to 01.10.2014)

 NIFTY :: 7969 (-160) (Further Bearishness for Nifty only below 7800….)

Nifty snapped Six week winning streak and fell nearly 2% in view of the Supreme Court verdict on Coal allocation issue but heaved a sigh of relief in the closing hour due to S&P news on credit outlook. However, SC’s verdict had taken a heavy toll of the market particularly metal and PSU Banks. Defensives like IT, Pharma and FMCG bucked the trend and remained resilient. Next week movement would be influenced by the outcome of PM’s US Visit. Further, RBI’s policy on Tues day would be the deciding factor for the market. If RBI Governor can bring out a positive surprise to the market , it could bounce back sharply. Otherwise, correction can be expected to continue. continued its gains for the Sixth week , though gained marginally.

Nifty moved in a narrow range during September and  appears to have taken support once again close to 50 DMA. IF Friday’s low level is not decisively breached, upside is possible. On the other hand, if it breaches 7825 decisively, Nifty could get into a bigger correction. Nifty needs to go above 8050 to get out of the present correction mode. Further, last week’s down move was a strong down move with Nifty breaching previous day’s low level on all the Five days which was a clear case of bearishness. Nifty needs to clearly trade above 8050 to negate the fall / down move.

While Nifty witnessed a fall of 2% on net basis, several mid cap stocks suffered a loss of even more than 10 - 20% in PSU Banks, Infra, Realty stocks.

If Nifty is to remain bullish for October, it needs to take support above 7800, failing which a deeper correction is possible.

Highly positive macro indicator is the falling crude oil prices and falling gold imports which would positively impact Current Account Deficit.

PSU Banks need to come out of the NPA problem which could take further time in view of the gravity of the problem. Recent Supreme Court verdict on Coal allocation has increased the woes of PSU Banks.  IT Sector is buoyant and further buoyancy too can be expected in view of strengthening US  economy. Infra and Power sector woes can be expected to be addressed by the present Government

Macro  economic indicators have turned positive in view of the falling crude oil prices and the heartening feature is that Oil marketing companies are making profit on diesel sale too.   If inflation too eases leading to reduction of interest  rates, economic revival would kick in leading to earnings growth and higher PE too. With a proactive and  committed Government at the centre, it would happen sooner than later. However, a reasonable correction  could take place before another leg of upmove. On the other hand, if market remains sideways for a considerable period also, it could be  taken as a correction. Stocks which have run up ahead of fundamentals are seen correcting. Most PSU stocks and Infra stocks corrected sharply during the last Two months. 

Technically, Nifty is bullish in all most frames and very short term trend would become positive when it closes above 8050.
20DMA, 50DMA, 100DMA and 200 DMA are placed at about 8060, 7885, 7670 and 7010 respectively and would act as supports / resistances. Nifty has taken support from about 50 DMA last Four times and could be expected to lend
strong support and a deeper correction could set in only if it closes and trades  below 50 DMA(7885) consistently (for more than a week).

Based on the present Government’s agenda, Infra  and Power sectors could come out of their problems soon . Stocks of promoters with proven record may be preferred in these sectors. Investors need to accumulate quality stocks while traders need to be ever vigilant.

Nifty continues to be above 200 DMA and 50 DMA too is above 200 DMA (Golden Cross) suggesting that the long term bullish trend is intact.   Nifty is quoting at a PE of under 21, which is about 18% above the  long term PE multiple.  Hence, further upside (  8500+ is possible during the year / before next Budget)  
in view of the  stable and performing Government  at the centre as earnings would go up because of favourable atmosphere .  IF Nifty stays around the present level for the next Six months, trailing PE could come down to less than 20 also.

 Market is usually ahead of fundamentals and fundamentals need to catch up with the present valuations which could take some time .

For Bank Nifty, strong Resistance exists around 15900 / 16000. If unable to pierce these levels, it could seek lower levels.
IT Index is trading in a narrow range of 250 points (11000 and 11250) and a directional move can be expected on breakout / break down.

Technical Levels ::

For the coming week, Nifty spot is expected to face
resistance at 8050,  8140, 8230 and find support at 7875, 7785, 7700.
Minor resistances may be found at 8065, 8140, 8190, 8205  and minor supports at 7870, 7795, 7750 and 7675.

For short term Nifty is bearish  with strong support at 7800 and would become bullish on a close above 8050  .

Advice for Traders ::
After Two narrow range weeks, Nifty broke down and appears to have support from about 50 DMA for the Fourth time.  Strong support for Nifty for October is at 7800 and if Nifty does not go below 7800 decisively, a new high  can be expected on the eve of Diwali. However, it needs to close above 8050 to reverse the present short term bearishness. Short positions too can be considered on rise with a strict stop loss of 8050 (on close basis) for a target of about 7850 (as there is a strong support at 7800 ).  In view of the truncated week, it could remain hyper  active too in view of the developments that can take place in view of PM’s visit to US  and RBI Policy.
RBI Policy would decide the course of the market for the week and for the month too.


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