SELL ON RISE
During the current week Moon would be transiting from Sravana in Capricorn to Revathi in Pisces.
Nifty, in short term beareishness, would come out of the same when it closes above 7650. Nifty appears to have topped out for the time being and gets into a mode of correction / consolidation.
During the current week Moon would be transiting from Sravana in Capricorn to Revathi in Pisces.
Sun transits in
Visakha in Gemini and Cancer (moves to Cancer on 16th
night). Mercury transits in Aardra in Gemini.
Mars
transits in Chitta constellation in Libra in vargottamamsa . Rahu
and Ketu had changed signed their signs and are now in Virgo and Pisces. Saturn in Retrograde
motion from 2nd March
till 20th July and presently in Visakha
constellation in Aries navamsa .
Jupiter transits in Pushyami
in Cancer . Grand square was operational last week and has separated.
Hence,volatility should reasonably come down.
Further, Nifty’s range from Tuesday to Friday (15th to 18th)
would act as a reference range for the next Three weeks and Nifty would be
bullish above the high of the range and would be bearish below the Low of this
range.
Nifty Outlook for Next
Week :: (14.07.2014
to 18.07.2014) (Topped
out for Short Term)…
NIFTY::7460 (-292)
Nifty had a roller coaster ride last week in
view of Railway and Finance Budgets and closed with a massive loss of about
3.75%. While Nifty’s loss does not seem so alarming, certain sectoral scrips
were beaten down out of shape. However, much awaited correction has come in
most stocks. However, matter of concern is that Bank stocks (constituting major
chunk of Nifty), because of Government’s decision to raise equity from public
issues, may face pressure in Medium term and could underperform leading to a
drag on the Nifty. Further, market had run up too fast recently and the
fundamentals have to catch up with this rise and during this time market could be
under consolidation. Sector specific / stock specific approach is most
important to beat the market.
While Budget, per se, was Good and the seed of
reforms was sown and could be expected to deliver the fruits during the course
of time, it can not be termed Great with big bang reforms / ideas, which the
market was expecting. However, the same could be expected in the next Budget
which is only about 7 months later. Government aims to achieve high growth with
low inflation and contain the deficit. Nifty
trading well below 20 DMA is bearish in short term and 50 DMA which is around
7375 could be expected to lend immediate support. Nifty may hover between
20DMa(7600) and 50DMA(7375) for some time and could bottom out around 100 DMA(around
7000) in course of time before commencing a new journey to make new high before
the next Budget.
Post Budget correction in most stocks could be
a welcome feature for long term investors who had missed out previously. Technically,
Medium and Long term trend is quite bullish and short term trends keeps
vacillating.. Present bull run is only about
8 months old, further rise over a period
of next One year can be expected despite the sharp initial rise. Inview
of the sharp rise, a consolidation or reasonable correction can be expected,
which would be healthy for the market.
Government’s policies would indicate their
thrust areas and sectors that would benefit out of it. However,
Infra, Power , which were expected to be the
thrust areas were given their right place.
Budget would spell out the major policies of
the Government.. IIP numbers declared after the market hours on Friday were
quite positive and in case of a sustained turn around, Government / RBI would
have a sufficient space for furthering reform process.
Stock specific approach is to be followed and
general positive sentiment can be expected to continue over Medium term.
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.
Last week’s sharp fall in most stocks could be
taken as 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.
Nifty is quoting at a PE of 20.12 , which is about 12% above the
long term PE multiple. Hence,
further upside ( 8000+ or 8500+ is possible during the year / befre next
Budget)
in view of the stable and performing
Government at the centre as earnings would go up because
of favourable atmosphere .
As a very stable and proactive
Government has been formed, market can be expected to go
up further over medium / long term and market
is always ahead of Fundamentals and this time is no exception.
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. When fundamentals too start improving, further rise over a
period can be expected.
Hence strong long term support would be
around 6550 level and Medium term support is 7000.
For the coming week, Nifty spot is expected to
face
resistance at 7550, 7655, 7720 and
find support at 7375, 7290, 7200.
Nifty, in short term beareishness, would come out of the same when it closes above 7650. Nifty appears to have topped out for the time being and gets into a mode of correction / consolidation.
For the next week,
break down level is 7350 and the break out level is 7900. It can be expected to
trade between 7375 and 7650 and real weakness for the week would set in only in
case of a close below 7350.
Advice for Traders ::
Much awaited
correction by Medium / Long term investors is under way as most stocks have
reasonably corrected. Stock specific approach may be followed and staggered
buying may be resorted to by long term investors in case of quality stocks. As
long as Nifty holds above 7375 during the week, further pullback can be
expected upto about 7500 / 7650. On the other hand, if it slips below 7350
, pullback ma not sustain and a deeper
correction can be expected.
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
Short positions may be avoided as long as it maintains / closes above
Weekly open and vice versa
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