Nifty Weekly Outlook (05th to 09th July 2010)

Last Week ending on Friday (02^nd July 2010) NIFTY lost around 0.61% and closed at 5237.10 as compared to the last week’s closing of 5269.05. On the weekly charts, NIFTY has made a Doji Candlestick, again for the second continuous week, which signals the presence of uncertainty in the markets, an equal fight between the buyers and sellers. On the very first day of the week, markets had a very good up run (especially by the OMC Companies both public and private) after the announcement made by EGoM to hike Kerosene, Diesel and LPG Prices and also the deregulation of petrol prices and praising of this Government’s decision by the Group of G-20 Countries. In the next trading sessions, markets observed a good selling pressure due to the downward revision of an economic indicator for China and downgrading of Spain to negative by Moody’s. For the week NIFTY made a high of 5339.45. NIFTY has moved much above its 40-Days EMA (Exponential Moving Average) of 4989.23 and is now taking support of its 20-Days EMA of 5229.42.

All the major International Indices are standing at their crucial support levels, from which if they bounce back will invite again a good up run, but at the same time if those are breached, will invite a good selling pressure too. For the next week, a good trading momentum will be observed in Sector Specific and other specific stocks, but then too traders should follow a cautious approach by following strict Stop Losses.

On the Global front, US will be witnessing a holiday on Monday, on the eve of Independence Day and other than that reports on jobless claims, consumer credit and wholesale inventories will top data agenda. If talked about the Asian Markets, monetary policy takes center stage, with Australian, South Korean and Indonesian central banks all expected to hold the line on key interest rates. Malaysia may raise rates. In Europe, both ECB (European Central Bank) and BoE (Bank of England) have the interest rate meeting.

On the Weekly Charts too, RSI (Relative Strength Index) is turning into positive zone, but with the ongoing uncertain global environment, traders are suggested to trade cautiously by following Strict Stop Losses and avoid making fresh investments at this point of time.

For the next week, the level of 5400/5450 will act as an important resistance, whereas the level of 5180/5150 will act as an important support for NIFTY.