Caution at Higher Levels….!!!

Planetary Position ::  During the current week Moon would be transiting  from Poorvabhadra in Aquarius  to Bharani in Aries.
Sun transits in Swathi and Visakha    in Libra.
Mercury   transits  in  Chitta   in   Virgo and Libra .
Venus transits in  Swathi and Visakha in Libra.
Mars  transits in   Moola and Poorvashadha constellation in Sagittarius .  
Saturn moves to Scorpio and transits in Visakha constellation and Cancer Navamsa.
Jupiter transits, in accelerated motion ,in Cancer in Aslesha constellation in   Aquarius and Pisces  navamsa ..

Nifty movement between Monday and Wednesday can be taken as the reference range for the next Three weeks and Nifty would be bullish  above the high of the range and bearish below the low of the range.
Volatile movements can be expected in the world markets on Tuesday and Wednesday.
( Special astro report for next week ( week beginning 10th November) can be had from this mail id on specific request)

Nifty Outlook for Next Week :: (03.11.2014 to 07.11.2014) …  

NIFTY :: 8322 (+308) (Time to Book Short term Profits….)
Nifty continued its smart rally for the Second week gaining about 4% due to global and domestic cues. FIIs have returned to the market in a big way. October month ended in style with a rise of about 600 points for Nifty in the last 10 trading sessions. BoJ’s improved stimulus coupled with easing of norms for FDI in construction have helped Nifty scale new high. As indices are at record new high, it is a moment of caution for traders. As inflation is set to fall further (with another Diesel rate cut), interest rate cut is a certainty and market seem to be discounting in advance. Market seem to be having best of both worlds ie., Reforms from Government and  falling crude prices .  Improved corporate performance too would come in soon which is being discounted by the markets. Despite these positive factors, market is fully priced and stock picking is the only way to perform in the market. Next Big event is Budget and big bang reforms can be expected in the buget. A path breaking budget can be expected.

Nifty is once again above all short term moving averages and  is infact at a new HIGH. However, in view of the over bought position, traders need to be vigilant and high degree of risk management is necessary.

20DMA, 50DMA, 100DMA and 200 DMA are placed at about 7955, 7985, 7815 and 7180 respectively and would
act as supports / resistances.

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 about 21.60, which is about 20% above the long term PE multiple.  Hence, further upside (  8500+ is possible  before next Budget). It is a record PE multiple in the recent times signaling a caution.   
in view of the  stable and performing Government  at the centre as earnings would go up because of favourable atmosphere .  
Market is usually ahead of fundamentals and fundamentals need to catch up with the present valuations which could take some time .

Strong long term support would be around 7200 level and Medium term support is 7800. Short term support is at 8100 and Nifty would become weak only on a close below 8100.
Technical Levels ::
For the coming week, Nifty spot is expected to face
resistance at 8415,  8505, 8600 and find support at 8230, 8140, 8050.
Minor resistances may be found at 8430, 8510, 8560, 8640  and minor supports at 8215, 8135, 8085 and 8000.

For short term Nifty is bullish and would become bearish only if it closes below 8100 and could encounter resistance could encounter resistance around 8500 during the week.

Advice for Traders ::
Nifty’s uptrend continued for the Second week and caution is the need of the hour in view of the over bought zone. While long and Medium term is certainly bullish, caution is necessary for short term. Risk is more for short term traders compared to the potential reward. However, Nifty would become weak only on a close below 8100 which appears unlikely for the week. Further, in view of the truncated week (market operating on alternate days), flow of the market could be disturbed and gap up / gap down too would be possible in view global markets.


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