ASTRO TECHNICAL GUIDE FOR NIFTY

for Next Week :: (07.10.2014 to 10.10.2014) …  

First Half (Tues &Wed) Range….  Monthly Astro Range….!!!

Planetary Position ::  During the current week Moon would be transiting  from Poorvabhadra in Pisces ti Bharani in Aries.

Sun transits in Hastha  in Virgo .

Mercury transits  in Swathi   in  Libra and in retro motion till 25^th October.

Venus transits in Hastha in  Virgo.

Mars  transits in   Jyeshta constellation in Scorpio .  

Saturn transits in Visakha constellation in Libra and in Taurus and Gemini Navamsa .  

Jupiter transits in Aslesha constellation in Cancer and in Capricorn and Aquarius navamsa ..

Nifty’s range between Tuesday and Wednesday would be the monthly astro range for the next Three weeks. Nifty would be bullish above the high and bearish below the Low for the next Three weeks.

While Sun’s ongoing conjunction with Venus is likely to depress values in general, Sun’s sextile aspect with Mars and Jupiter could benefit Public Sector  undertakings.  

 NIFTY :: 7946 (-13) (Nifty Bullishn only above 8050….)

Nifty traded in a narrow range in a truncated week and fell marginally and completed its Second week of fall. After the closing of our market on Wednesday, global market (Dow etc., ) experienced a roller coaster ride and holidays for our market have averted such a move.  We will have another truncated week next week with the week beginning on Tuesday. As movements in September month were generally narrow, October month could see a wider range considering the events such as State elections and Q2 results in addition to key events such as Diesel deregulation etc., Public Sector Banks, Infra and Realty sectors are quite weak and the sentiment would not improve unless these sectors rebound. Financials are quite important as they constitute significant portion of Nifty. Value investors with a medium / long term horizon can consider well run banks with lower incidence of NPAs. It is time for this Government to do something concrete on economic front particularly issues such as Gas pricing which would impact other sectors too.

Nifty moved in a narrow range during September and  appears to have taken support once again close to 50 DMA. 50 DMA is placed around 7900 and Nifty had taken support around 50DMA on previous Four occasions and it is to be seen whether it would do it this time too. If Nifty closes below 50 DMA for Two weeks, it could trigger a bigger correction. Further,  Nifty needs to clearly trade above 8050 to negate the present fall / down move.

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. RBI has indicated a rate cut only if Inflation comes under control. Hence, ff inflation 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  most time frames and very short term trend would become positive when it closes above 8050.

20DMA, 50DMA, 100DMA and 200 DMA are placed at about 8045, 7905, 7700 and 7035 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(7905) 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 making a case for another upmove.

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

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Further, Nifty had been trading in a range of 4600 to 6300 (till 2013) for more than 4 years and  a  powerful breakout had taken place  for an initial target of about 8200 / 8500.. Hence strong long term support would be around 7050 level and Medium term support is 7700.

For Bank Nifty, strong Resistance exists around 15900 / 16000. If unable to pierce these levels, it could seek lower levels.

IT Index came out of the narrow range and is trading nearer to the resistance point of 11550. Caution is advised at higher levels as a reasonable pullback appears due.

Technical Levels ::

For the coming week, Nifty spot is expected to face

resistance at 8035,  8125, 8215 and find support at 7855, 7765, 7680.

Minor resistances may be found at 8000, 8040, 8065, 8105  and minor supports at 7890, 7850, 7825 and 7785.

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

Advice for Traders ::

Nifty traded in a narrow range as there were only Three trading sessions during the week. October month , in general, could be a wide range month in view of State election results and Q2 results. Further, range expansion is natural after contraction. Nifty is weak as long as it does not close above 8050. If 7800 is decisively breached, further downside is possible. Scrip / sector  specific is most likely.  Sell on rise with 8050 as stop loss on close basis and Buy on Decline with 7800 as stop loss on (close basis)., Generally, Nifty could rebound after Three weeks’ of fall. Hence, if Nifty falls during the current week, it could rebound later during the month.