WEEKLY ASTRO TECHNICAL GUIDE FOR NIFTY

CAUTION @ HIGHER LEVELS

During the current week Moon would be transiting  from Uttarabhadra  in Pisces to Krittika in Capricorn .

Sun transits in  Anuradha   and Jyeshta  in Scorpio.

Mercury   transits  in   Anuradha and Jyeshta constellations in  Scorpio  .

Venus transits in   Jyeshta in Scorpio.

Mars , exalted,  transits in   Uttarashadha  constellation in  Capricorn .  

Saturn transits in  Scorpio  in Visakha constellation and Leo Navamsa.

Jupiter transits in  Cancer in Aslesha constellation in    Pisces  navamsa ..

Nifty range of 1^st December and 2^nd December would be the reference range for December and Nifty can be considered bullish above the high of the range and can be considered bearish below the low of the aforementioned range.  

Nifty Outlook for Next Week :: (01.12.2014 to 05.12.2014) …

NIFTY :: 8588 (+111) (RBI Policy holds the Key)

Nifty rallied for the Sixth week in a row. However the net rise during Four weeks has been relatively small aggregating about 3%. Bank stocks were the main contributors for the current rally as interest rate cut is around the corner. With sagging  GDP growth, interest rate cut is a necessity now and RBI has the best opportune time to respond. Market discounts future events in advance and rate cut appears most likely. “Buy on Rumour and Sell on News” is the saying of the market. In the event of a rate cut, market could give up some of the gains due to profit booking etc., before another cycle of uptrend. On the other hand, if there is no rate cut too, market would be disappointed and would fall. In either case, caution is the buzzword for the week and a reasonable correction could set in either this week or next week.  Further, Government could push certain reform bills in the forthcoming winter session of Parliament. Sentiment is upbeat because renewed FII interest, reforms by the Government and proactive nature of the present Government and global cues. However, short term uptrend is already Six weeks old and a small correction (week on week) is overdue and can  be expected sooner than later. In view of the above, scrip specific approach is to be followed in general . Despite the Nifty’s gain for the last Six weeks, range of Nifty during November is quite narrow (less than 4%) and a wide range month can be expected during December.

All eyes are on RBI as market is expecting a rate cut and if the market is disappointed on this count, a sizeable correction can be expected. Present positive  Macro factors would have their positive effect on corporate earnings with a lag effect and the market is ahead of fundamentals. Falling crude and commodity prices coupled with lower interest cost (rate cut to be announced) would all help improve corporate earnings next year and market appears to have largely factored them in their prices. All in all, Stock market is a barometer of the economy and foretells future in advance. Despite these positive factors, market appears to be  generally fully priced and stock picking is the only way to perform in the market. Next Big event is Budget and big bang reforms can be expected in the budget.

Nifty is once again above all short term moving averages and  is infact at a new HIGH. However, in view of the overbought position, traders need to be vigilant and high degree of caution with proper risk management is necessary. Short term correction is only a matter of time and leveraged positions need to be properly protected.

20DMA, 50DMA, 100DMA and 200 DMA are placed at about 8400, 8140, 7970 and 7380 respectively and would

act as supports / resistances.

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 22, which is about 22% above the  long term PE multiple.  Expected target for the year was 8500 (as being reported in this column for the last Four months ) has been reached  ahead of time. Next big events are Government’s reform process (GST Bill) and Budget.

Strong long term support would be around 7380 level and Medium term support is 7970. Short term support is at 8450 and Nifty would become weak only on a close below 8450..

For the coming week, Nifty spot is expected to face resistance at 8680,  8775, 8870 and find support at 8495, 8405, 8310.

Minor resistances may be found at 8690, 8765, 8815  and minor supports at 8485, 8410, 8360.

For short term Nifty is bullish and would become bearish only if it closes below 8450 in first half of the week and below 8500 in Second half of the week.

Breakout level for the week is 8665 and break down level for the week is 8380. Break out level for December is 8700 and Break down level for December is 8200. Unless 8700 is decisively crossed, further uptrend for December is unlikely.