WEEKLY ASTRO GUIDE FOR NIFTY

PULLBACK POSSIBLE...!!!

(13.10.2014 to 17.10.2014)

Planetary Position ::

During the current week Moon would be transiting  from Mrigasira in Taurus to Aslesha in Cancer.

Sun transits in Chitta   in Virgo .

Mercury , in Retrograde motion, transits  in Chitta   in  Libra and Virgo  and would be  in retro motion till 25^th October.

Venus transits in Hastha and Chitta in  Virgo.

Mars  transits in   Jyeshta constellation in Scorpio .  

Saturn transits in Visakha constellation in Libra and in  Gemini Navamsa .  

Jupiter transits in Aslesha constellation in Cancer and in  Aquarius navamsa ..

Nifty’s range between last week Tuesday and Wednesday was  the monthly astro range for the next Three weeks. Hence Monthly astro range for Nifty is 7973 and 7816. Nifty would be bullish above the high(7973) and bearish below the Low(7816) for the next Three weeks.

Venus Sun conjunction (generally referred to as Sukra Moudhyam) is generally bearish and Mercury retro motion gives scope for dual movement. Statistics / information during Mercury retro period is generally misleading and unreliable.

Nifty Outlook

 NIFTY :: 7860 (-66)

(Further Bearishness only Below 7800….)

Nifty’as Bearishness continued for the Third week and is close to strong support level of 7800. Unless Nifty closes below 7800, further bearishness need not be expected. However, Nifty would become bullish only when it crosses / closes above 7975. Q2 results season began with a bang with Infy springing a surprise with a liberal Bonus too. However, IT and Pharma indices which have been outperformers suffered a set back last week (barring Infy). Falling crude prices is a blessing for India’s macro economic fundamentals and Current Account Deficit , which is well under control, should leave enough room for reforms etc., Big reforms can be expected from the Government after the Maharashtra election results which would be out by the end of the week and next Budget should really be path breaking if the present Government  is fully committed to growth and reforms. IIP figures released after Friday market was disappointing and the recent coal blocks cancellation could have its effect even in the next couple of months also. Hence it is time for the Government to act to spur growth. Despite some bounce from lower levels, Public Sector Banks continue to be weak.  Public Sector Banks, Infra and Realty sectors are quite weak and the sentiment would not improve unless these sectors rebound. Financials are quite important as they constitute significant portion of Nifty. Value investors with a medium / long term horizon can consider well run banks with lower incidence of NPAs. It is time for this Government to do something concrete on economic front particularly issues such as Gas pricing which would impact other sectors too.

Nifty closed the week  below 50 DMA, which is placed above 7900. Unless it closes above 50dMA and continuously trades above 7900, short term bearishness would continue. On the other hand, if Nifty witnesses another Down week, further correction can be expected. Further,  Nifty needs to clearly trade above 7975 to negate the present fall / down move.  Maharasthra Election results would be the bigger trigger for this month.

If Nifty is to remain bullish for October, it needs to take support above 7800, failing which a deeper correction is possible.

Highly positive macro indicator is the falling crude oil prices and falling gold imports which would positively impact Current Account Deficit.

PSU Banks need to come out of the NPA problem which could take further time in view of the gravity of the problem. Recent Supreme Court verdict on Coal allocation has increased the woes of PSU Banks.  IT Sector is buoyant and further buoyancy too can be expected in view of strengthening US  economy. Infra and Power sector woes can be expected to be addressed by the present Government

Technically, Nifty is bullish in  most time frames and very short term trend would become positive when it closes above 8050.

20DMA, 50DMA, 100DMA and 200 DMA are placed at about 7995, 7915, 7730 and 7070 respectively and would

act as supports / resistances. Nifty needs to close decisively above 50 DMA to resume short term uptrend.

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 (Golden Cross) suggesting that the long term bullish trend is intact.   Nifty is quoting at a PE of about 20.50, which is about 17% above the  long term PE multiple.  Hence, further upside (  8500+ is possible during the year / before next Budget)  

in view of the  stable and performing Government  at the centre as earnings would go up because of favourable atmosphere .  IF Nifty stays around the present level for the next Six months, trailing PE could come down to less than 20 also making a case for another upmove.

Market is usually ahead of fundamentals and fundamentals need to catch up with the present valuations which could take some time .

Strong long term support would be around 7100 level and Medium term support is 7700.

Technical Levels ::

For the coming week, Nifty spot is expected to face

resistance at 7950,  8040, 8130 and find support at 7770, 7685, 7600.

Minor resistances may be found at 7910, 7945, 7970, 8005  and minor supports at 7810, 7775, 7750 and 7715.

For short term Nifty is bearish  with strong support at 7800 and would become bullish on a close above 7975

Advice for Traders ::

Nifty continues to trade in a relatively narrow range with bearish bias with strong supports at 7800, 7750 and 7700. In view of multiple supports between 7700 and 7800 and the time wise correction ( fell about 3% in last Five weeks), downside appears limited. However, the above is subject to the big event of Maharashtra Election results which is prestigious for the Modi Government’s performance in the last 4 months. Q2 results too would affect the prices of specific companies and sectors. In view of the narrow range of September, a wider range too can be expected in October.

A reasonable pullback can be expected which could turn into a reversal of bearish trend if the Big event turns out to be positive for the market.