NIFTY :: 8201 (-24) (Consolidation Mode Likely … )

While Nifty closed nearly flat for the week erasing initial gains of the week due to derivative expiry concerns. Derivative series closed negative, one of the few instances in 2014. Parliament session ended without transacting any major business. However, Government’s resolve towards reforms was evident with the promulgation of ordinances on Coal and Insurance.  State Election results were also in line with general expectations. New Derivative series started off on  a  cautious note and would be influenced by corporate results and the reform measures of the Government. Last week’s movement was rather erratic with Nifty closing above 8300 and then closed below 8200 due to derivative expiry pressures. Macro economic scenario continues to be positive with falling crude oil prices but strengthening US $ / depreciating INR is a cause for worry. Next major policy would be the Budget / GST / Reform Process of the Government. Most of the unfinished items on reform agenda have been attended to by the Government and the it would take time to yield the results.
Nifty’s chart pattern suggests selling at higher levels and might not make new high with out possible further downside. If Nifty closes below 8100, downside would be confirmed. On the upside 8350 to 8400 could prove to be a major hurdle to cross.
20DMA, 50DMA, 100DMA and 200 DMA are placed at about 8330, 8265, 8095 and 7590 respectively and would
act as supports / resistances. Nifty is below 50 and 20 DMA and is above 100DMA and could offer support. If 100 DMA is clearly breached, it could slide further deeply.
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 which is about 17% above the
long term PE multiple.  Further fall to about 20PE would make it attractive (During December  it touched about 20.35PE) . TTM EPS and  PE would improve after Q3 results.  Psu Banks seem to be enjoying high degree of margin of safety and qualify for a Value Buy as market can not complete its bull run with out the participation of this sector.  Policy initiatives might improve sagging Infra and Realty sectors.
Strong long term support would be around 7600
level and Medium term support is 8100. 

Planetary Position
During the current week Moon would be transiting  from Revathi in Pisces to Rohini in Taurus.
Sun transits in  Moola and Poorvashadha   in  Sagittarius.
Mercury   transits  in    Poorvashadha and Uttarashadha  constellation in  Sagittarius.
Venus transits in  Uttarashadha   in Sagittarius and Capricorn.
Mars , exalted,  transits in    Dhanisha  constellations in  Capricorn .  
Saturn transits in  Scorpio  in Anuradha in Leo and Virgo Navamsa.
Jupiter , in retrograde motion from December 9th   to 8th April 2015, transits in Cancer in Aslesha constellation in Pisces  navamsa .
Rahu and Ketu continue their transit in Virgo and Pisces respectively.
Nifty’s range between 26th December and 29th December (Friday to Monday) would be the reference range for the next month and Nifty would be bullish above the high of the range and bearish below the low of the range for January.

Technical Levels ::
For the coming week, Nifty spot is expected to face
resistance at 8290,  8385, 8475 and find support at 8110, 8020, 7930.
Minor resistances may be found at 8265, 8310, 8350, 8400  and minor supports at 8135, 8080, 8050, 8000.
Nifty is in narrow range with bearish bias and downside would be confirmed on a close below 8100 while upside would be confirmed on a close above 8300.
Further huge resistance is also placed around 8400 – 8450, which if crossed only , a new high can be expected. Hence, it may not be a smooth ride for a New high in January.
Breakout level for the week is 8420,  and break down level for the week is 8090.

Advice for Traders ::
Usually new derivative series begins with optimism which appeared to be missing due to holiday season. Market seems to be favouring PSU Bank because of their margin of safety. Nifty is in a neutral zone and a close above 8300 or close below 8100 would provide further direction.
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


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