WEEKLY ASTRO GUIDE FOR NIFTY

HIGHLY VOLATILE WEEK

Amarnath Sastry, Astro Technical Analysy

 

General outlook for the week (12.05.2014 to 16.05.2014) ::

Planetary Position ::  During the current week Moon would be
transiting  from Chitta  in Virgo to Jyeshta   in Scorpio.  Sun transits in Krittika in Aries and Taurus. .  Mercury transits  in Rohini  in  Taurus. Mars  transits in  Hastha  constellation in Virgo  and has been in  Retrograde motion from 1^st March till 20^th May.    Saturn too in  Retrograde motion from 2^nd March till 20^th July and presently in  Visakha  constellation in  Taurus navamsa.   Jupiter transits in Punarvasu  in Aries and Taurus Navamsa.   Nifty’s monthly astro range during 25^th April to 28^th April was 6870 and 6750 and after nearly achieving first target and is close to the upper end and might touch 6990 / 7110 once it is clearly above  6870. In view  of the domestic political  developments, a special scenario exists in our country and exit poll and poll results would influence market movements. Actual poll results could surpass exit poll results and hence weakness (if any) after exit poll results could be used for buying with appropriate hedge.

 Nifty Outlook for Next Week  Volatile Movements with Bullish Bias)…  

  NIFTY :: 6859 (+164)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        After remained subdued till Thursday, Market zoomed on Friday by about 3% and the week closed with smart gain. Current week would be quite crucial for the entire year as election results would be out on Friday preceded by exit poll results on 12^th evening. Market appears to have sensed formation of a stable Government and rallied on Friday. Market on 13^th and 16^th would be crucial as exit poll and poll results would be out. While formation of stable Government is by large factored into the present market, a more stable Government and the policies of the Government would drive the market further. On the otherhand, if the poll results disappoint, considerable fall too can ot be ruled out. Historically, May (during Even year) has been bearish and a sizeable correction can be expected. However, current year could be different considering a major event for India. Nifty reversed from a very crucial support level of about 6650. Key support level of 6650 can be considered as a major support level this week too. Primary trend , which is presently up, could change only if an unstable Government with weak leadership takes charge at the centre. However, as market has been going up for the last Seven months hoping for a stable Government, the same could be expected. (However, market was proved incorrect on the last Two occasions).While Investors can accumulate quality stocks on SIP basis, traders need to be highly cautious and traders may utilize Options route to hedge their positions. Sectoral rotation has become order of the day and different sectors should be tracked to discern individual stock trends.   Investors need to accumulate quality stocks while traders need to be ever vigilant. However, any sharp fall for any reason would be an opportunity to Buy for Medium / Long term.

Nifty continues to be above 200 DMA and 50 DMA too is above 200 DMA suggesting that the long term bullish trend is intact. Bank Nifty too  is above 200 DMA.  Big event of 2014 is Loksabha Elections and the outcome would dictate the future trend.  As of now, market expects NDA to return to power and carry the development agenda and stock market discounts future in advance.  Even with the recent  rise, Nifty is quoting at a PE of 19.10 , which is only 5% above the long term PE multiple  of 18. Hence, further upside (upto 7500 to 8000) is possible  in case  a stable and performing Government returns to power at the centre as earnings go up over the time in an inflation ridden economy and further upbeat sentiment can fuel the indices as market are usually irrational and emotional.

Further, Nifty had been trading in a range of 4600 to 6300 for more than 4 years and  a  powerful breakout appears to be unfolding. (expected post election results but the liquidity is in a hurry  to complete the task as stock market is  usually ahead by about  Six months. Hence strong long term support would be around 6200 level and Medium term support is 6450 and for short term support is 6625.   For the current week, Last week’s range is to kept as reference as strong resistance  could be expected around 6800 and support around 6625.  Breakout level for the week is 6800 and break down level is 6625. If breakout is achieved, Buy on Decline  policy may be followed and vice versa.

For the coming week, Nifty spot is expected to face resistance at
6940,  7025, 7110, 7200 and find support at 6775, 6695, 6610, 6530.

Nifty is in short term bullishness with Friday’s strong up move and a close below 6725 would bring back bearishness. However, in view of the expected huge volatility, traders may choose Option route to hedge their positions.

Advice for Traders :: Breakout and Break down levels for the current week for Nifty spot  are 6930 and 6580 and Nifty would be bullish for the week above 6930. If Nifty crosses 6930, long positions can be considered on decline with an appropriate option as a hedge. However, in view of the huge volatility, traders may choose options instead of futures.

WD Gann’s
natural numbers which would act as natural support and resistance are
, :  ,  ,  6521, 6628, 6769,6913,6983, 7067, 7151 during the week.

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