During the current week Moon would be transiting from Swathi in Libra to Poorvashadha in Sagittarius. Sun transits in Pushyami in Cancer . Mercury transits in Punarvasu and Aslesha in Cancer. Mars transits in Swathi constellation in Libra . Rahu and Ketu continue in Virgo and Pisces in Vargottamamsa. Saturn transits in Visakha constellation in Libra and in Aries navamsa . Jupiter transits in Pushyami in Cancer . Sun Uranus Trine and Sun Mercury conjunction could help the market recover while Sun Saturn square could be a dampener. Saturn’s aspect on Cancer with Three planets could dampen the spirit.
Nifty Outlook for Next Week :: (04.08.2014 to 08.08.2014) )… (RBI Policy holds the Key)
NIFTY::7603 (-187)
After Two weeks of uptrend, Nifty fell for Three out of Four trading sessions last week and lost about 2.50%. August months started off on a negative note. As pointed out last week, Nifty appears to be preparing for a reasonable correction considering the uptrend of last Six months. However, correction could take place in a zigzag manner and chart suggests that the short term peak is in place. Even if the market makes another peak, market is likely to have a correction sooner than later. Hence caution is advised at higher levels.
Technically, Nifty is at a crucial point and is close to 50 DMA and had taken support from 50DMA in the last Two occasions. Hence some bounce from this level is possible and when ever 50 DMA is clearly breached correction would accelerate. However, scrip / sector specific movement has been the order of the day and better to focus on individual stocks than on Nifty. Favourites like IT, Pharma and FMCG had done well recently once again. Further, market has risen smartly in the last Six months ahead of fundamentals and fundamentals would take some time to catch up. Q1 results of certain companies are disappointing and suggest that market has run up too much ahead and could take more time in consolidation.
FIIs too started selling during the week and Re too is beginning to weaken and is trading clearly above 60.
If FII selling continues, a sharper correction in short term can not be ruled out.
Based on the present Government’s agenda, Infra and Power sectors could come out of their problems soon . Stocks of promoters with proven record may be preferred in these sectors. Investors need to accumulate quality stocks while traders need to be ever vigilant.
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 just above 20 , which is about 11% above the long term PE multiple. Hence, it could pullback nearer to long term average if the correction continues. (After another Two quarters, Nifty would adjust to long term PE even if stays around present level as earnings would improve)
However, further upside ( 8000+ or 8500+ is possible before next Budget) in view of the stable and performing Government at the centre as earnings would go up because of favourable atmosphere .
Further, Nifty had been trading in a range of 4600 to 6300 (till 2013) for more than 4 years and a powerful breakout had 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 6700 level and Medium term support is 7150.
Resistance Levels for the Week :: 7690, 7780, 7865
Support Levels for the Week :: 7515, 7430, 7345.
Nifty entered short term bearishness due to last week’s fall. It would get out of the bearishness Only if it closes above 7750 in first half of the week and above 7700 in Second half of the week.
Advice for Traders ::
Nifty has given up short term bullishness. It would remain bearish as long as it holds below 7725.
RBI policy would provide direction to the market besides global cues, FII inflows etc., Present policy would be to “Sell on Rise” as long as it does not go above 7725.
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
Nifty Outlook for Next Week :: (04.08.2014 to 08.08.2014) )… (RBI Policy holds the Key)
NIFTY::7603 (-187)
After Two weeks of uptrend, Nifty fell for Three out of Four trading sessions last week and lost about 2.50%. August months started off on a negative note. As pointed out last week, Nifty appears to be preparing for a reasonable correction considering the uptrend of last Six months. However, correction could take place in a zigzag manner and chart suggests that the short term peak is in place. Even if the market makes another peak, market is likely to have a correction sooner than later. Hence caution is advised at higher levels.
Technically, Nifty is at a crucial point and is close to 50 DMA and had taken support from 50DMA in the last Two occasions. Hence some bounce from this level is possible and when ever 50 DMA is clearly breached correction would accelerate. However, scrip / sector specific movement has been the order of the day and better to focus on individual stocks than on Nifty. Favourites like IT, Pharma and FMCG had done well recently once again. Further, market has risen smartly in the last Six months ahead of fundamentals and fundamentals would take some time to catch up. Q1 results of certain companies are disappointing and suggest that market has run up too much ahead and could take more time in consolidation.
FIIs too started selling during the week and Re too is beginning to weaken and is trading clearly above 60.
If FII selling continues, a sharper correction in short term can not be ruled out.
Based on the present Government’s agenda, Infra and Power sectors could come out of their problems soon . Stocks of promoters with proven record may be preferred in these sectors. Investors need to accumulate quality stocks while traders need to be ever vigilant.
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 just above 20 , which is about 11% above the long term PE multiple. Hence, it could pullback nearer to long term average if the correction continues. (After another Two quarters, Nifty would adjust to long term PE even if stays around present level as earnings would improve)
However, further upside ( 8000+ or 8500+ is possible before next Budget) in view of the stable and performing Government at the centre as earnings would go up because of favourable atmosphere .
Further, Nifty had been trading in a range of 4600 to 6300 (till 2013) for more than 4 years and a powerful breakout had 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 6700 level and Medium term support is 7150.
Resistance Levels for the Week :: 7690, 7780, 7865
Support Levels for the Week :: 7515, 7430, 7345.
Nifty entered short term bearishness due to last week’s fall. It would get out of the bearishness Only if it closes above 7750 in first half of the week and above 7700 in Second half of the week.
Advice for Traders ::
Nifty has given up short term bullishness. It would remain bearish as long as it holds below 7725.
RBI policy would provide direction to the market besides global cues, FII inflows etc., Present policy would be to “Sell on Rise” as long as it does not go above 7725.
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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