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NIFTY @ 8806 (+145)

During the current week Moon would be transiting  from Poorvashadha  in Sagittarius  to Poorvabhadra in Aquarius.  
Sun transits in  Dhanishta and Sathabhisham in Aquarius.
Mercury   transits  in      Uttarashadha and Sravana in Capricorn in direct motion. Market witnessed dual movement when it was in retro motion .
Venus transits in    Poorvabhadra  and Uttarabhadra in Pisces.
Mars transits in  Uttarabhadra in Pisces.
Saturn transits in   Anuradha constellation in Scropio sign and in Virgo Navamsa.
Jupiter , in retrograde motion from December 9th   to 8th April 2015, transits in  Cancer in Aslesha constellation in Capricorn Navamsa  .
Rahu and Ketu continue their transit in Virgo and Pisces respectively.
As mentioned in last week report, market bottomed out on Tuesday and is in uptrend for a Pre budget rally.


Nifty has been behaving unusually in the new year with either continuous uptrend without any retracement or continuous downtrend without any pullback.  Nifty fell continuously for 7 trading sessions from 8952 to 8526 and had gone up for Four  days to close above 8800 mark. Markets ignore the event after it is out and same thing happened with Delhi results too. With another Eight trading sessions to go for Budget, whether the present bullish momentum would sustain or not is to be seen. Before the Budget, there would be Railway and Economic Survey which too would impact market movement.
Technically, Nifty can run up till Budget for a new high due to the optimism. Altenatively, it may not make a new high before budget but retrace and could go up / down steeply after the Budget on the strength of the proposals. In either case, long term trend is bullish and investors can accumulate quality stocks on dips while traders need to be highly careful. It, Pharma and Private sector Banks are generally bullish while Metals, Public sector banks are clearly bearish. Infra and Realty stocks are generally bearish.
Budget proposals could facilitate positive environment for certain sectors with encouraging proposals. Further it is to be seen whether Delhi results would slow down reforms or not?
Further monetary policy of RBI  too would depend on Budget proposals etc.,  Hence Budget proposals are the key for further market movement during the year.
However, there would be a lag between effort and the results and once corporate results improve confidence would further grow.
As First full fledged budget of the new Government is less than Three weeks away,  optimism can be expected before Budget . Any further correction relative to recent rise can be considered as an opportunity to Buy.  End of correction could coincide with Delhi election results.
20DMA, 50DMA, 100DMA and 200 DMA are placed at about 8730, 8460, 8320 and 7925 respectively and would
act as supports / resistances. Nifty is above all averages .

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 23.31 which is around   25% above the long term PE multiple.  Nifty EPS fell after Q3 results and the EPS fell from 391 to 378  due to change in weightage of Nifty constituents. Nifty PE, though not in bubble zone, is indicating caution and earnings need to improve substantially over the next Two quarters  failing which a reversion to mean with a serious correction can not be ruled out.

Strong long term support would be around 7925 and Medium term support is 8350. 

Technical Levels ::
For the coming week, Nifty spot is expected to be Bullish above 8830 with
resistance at 8915, 9000, 9050 and 9130 and is expected to Bearish below 8780 with Supports at 8695, 8615, 8560, 8480.

Short term trend for Nifty is presently bullish and would continue to remain bullish as long as it holds above 8650.

Breakout level for the week is 8910,  and break down level for the week is 8380. 

Advice for Traders ::
Market went up smartly from lower levels despite BJP’s debacle in Delhi elections as Market usually reacts more before the news and less after the event. Pre Budget rally appears to have begun and the short term trend is in sync with long term trend. A clear case of “Buy on Decline” with 8650 as stop loss can be considered and stop loss can be trailed progressively.
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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