WEEKLY ASTRO GUIDE FOR NIFTY

CAUTION @ HIGHER LEVELS

(General outlook for the week 26.05.2014 to 30.05.2014)

 Planetary Position ::  During the current week Moon would be transiting  from Aswini in Aries to   Mrigasira in Gemini. .  Sun transits in Rohini  in  Taurus. .  Mercury transits  in Mrigasira in  Gemini.  Mars  transits in  Hastha  constellation in Virgo .  Saturn  in  Retrograde motion from  2^nd March till 20^th July and presently in  Visakha  constellation in  Taurus navamsa .  Jupiter transits in Punarvasu in Gemini and  in  Taurus Navamsa. Sun square Neptune and Mars after being Direct, in hard aspect to outer planets is another factor to consider for correction in markets. But in view of the upbeat sentiment in Indian markets, it is to be seen, how far this will occur.  Nifty’s monthly astro range is  the range between 21^st May and 23^rd May, 2014 and the high and Low during the above period was 7381 and 7207 and Nifty would be bullish above 7381 and bearish below 7207 and first upper side target is 7560. Caution at higher levels is advised.

Stock Specific Approach – Need of the hour

NIFTY::7367(+164)  

Nifty gained for the Third week and gained about 2% during the week. PSU Bank stocks were the major gainers during the week . Mid cap stocks too gained smartly and the midcap index rose nearly 15% during May. These developments show the expectations from this Government. Sectors which lagged behind during the last few years due to Government’s policies might  to do better (as Government is expected to address these issues and remove the bottlenecks. Going by Modi’s record in Gujarat, reform oriented, market friendly policies can be expected from this Government which would boost investment, employment etc., and create a congenial environment for business and Industry and as usual, Stock market started already discounting these factors  for the last Eight months. Once the Government is place, reform measures could be rolled out.

While Nifty had gained more than 2%, it could not go past the euphoric top of May 16^th. Market can be expected to consolidate after the steep rise of the past Three weeks. Hence, there is a possibility of side ways movement / minor correction after the 26^th, ie., Swearing in ceremony. Hence, traders need to be cautious at higher levels. However, investors need to buy in staggered manner in view of the promise that the market holds for future. Stock specific approach needs to be followed by investors.

\Cyclicals , rate sensitive and financials (which have been underdogs) could be preferred to exported oriented sectors such as IT, Pharma etc.,

Market is Bullish in all time frames i.e., Long term, Medium term and Short term. Key support levels for the above time frames are 6300, 6650 and 7200 respectively. In case Nifty closes below 7200 in first half of the week and below 7300 in Second half of the week, short term reversal would be in place.

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.  Even with the recent  rise, Nifty is quoting at a PE of above 20 , which is about 12% above the long term PE multiple.  Hence, further upside (upto 8000 to 8500) is possible  in view of the  stable and performing Government  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. As a very stable and proactive Government is being formed, market can be expected to go up further over medium / long term.

 

Further, Nifty had been trading in a range of 4600 to 6300 for more than 4 years and  a  powerful breakout has taken place  for an initial target of about 8000 / 8500. Hence strong long term support would be around 6300 level and Medium term support is 6650 and for short term support is 7200.  

For the coming week, Nifty spot is expected to face resistance at
7455,  7540, 7620 and find support at 7285, 7190, 7110.

Nifty is in short term bullishness with and immediate stop loss is 7200 in first half of the week and 7300 in Second half of the week.

Advice for Traders :: Caution is advised at higher levels. In case Nifty closes below the Weekly open level, long positions may be avoided. Risky traders can consider short positions in case Nifyt closes below 7200 or below weekly open level with the high level till then as strict stop loss. Immediate stop loss for Nifty is 7200.