Nifty Weekly Outlook (24th to 28th October 2011)

From 5132.30 to 5049.95, NIFTY lost almost 82.35 points and ended in Red last week on Friday (21^st October 2011) at 5049.95 losing almost around 1.60% as compared to the last week’s closing of 5132.30. For whole of the week, NIFTY moved more or less on the actions and news flows of European Markets only. It witnessed Gap Up Openings in some of the sessions due to G-20 Meeting and its expected outcomes. Market traded in a tight range in the last week with a bit of volatility. Q2 FY11 Results Season was a major factor for the movement witnessed in some of the Sectors and Stocks. BANKING, FINANCE, METAL, TEXTILE, AUTO, CONSUMER DURABLES, IT, OIL & GAS, POWER and REALTY & INFRA GOODS were the major movers in last week. It can be said that the market was good for traders in the last week, as it once again disappointed the investors, reverting from important supports and resistances. Big Boys like TCS, HCLTECH, BAJAJ-AUTO, CAIRN, GRASIM, LT, AXISBANK, HDFC, HDFCBANK and HEROMOTOCO presented a mixed bag of results; many companies witnessed a drop in Bottom Line due to Forex Losses. For the week, NIFTY made a low of 5011.05 and did not breach the level of 5000. Finally after witnessing a dull and range bound movement for whole of the week, it ended at 5049.95.

Technically, NIFTY has made a Black Opening Marubozu Candlestick Pattern, which is also appearing as a Bearish Belt Hold Pattern. A confirmation of the trend reversal with either a black candlestick, a large gap down or a lower close on the next trading week is required. If a look at chart is taken, NIFTY seems to be moving in a range since last seven weeks and at the same time a negative crossover between 100-Days SMA (Simple Moving Average) and 40-days EMA (Exponential Moving Average) is witnessed. An Extension Level is being drawn from the Low of 2539.45 (week ended 06^th March, 2009) to the life-time high of 6338.50 (week ended 05^th November, 2010), which represents that NIFTY is taking support of its 38.20% Retracement level of 4887.26. It has already breached its 23.60% level of 5441.92. A Positive Divergence can also be witnessed in sync with RSI (Relative Strength Index), which signals a northbound movement in the markets in the coming weeks. 5200 is a Crucial Resistance for NIFTY to cross on the closing basis, which proved right thrice. NIFTY is trading below its 40-Days EMA and 100-Days SMA of 5319.02 and 5416.84, respectively.

Unless, NIFTY gives a positive closing above the levels of 5670, Investors are suggested to avoid making investment in the Markets right now and wait for the right direction for the market and Traders are suggested to trade with the market trend in the markets by following Strict Stop Losses.

If a look at International Markets is taken, all the Markets around the Globe traded more or less in a range and not much action was witnessed. 

FIIs (Foreign Institutional Investors) and DIIs (Domestic Institutional Investors) both were the Net Sellers of Rs. 626.94 Crore and of Rs. 600.67 Crore, respectively, in Cash Segment for the last week.

Q2 FY11 Results Season is running all over the Financial World. Hence, more of Sector Specific and Stock Specific actions will be witnessed. Here is a quick look at some important results to be announced next week in India. PFIZER, NFL, UNIONBANK, AJANTA PHARMA, STAR, TATACOFFEE, DELTACORP, STER, ITC, TITAN, GAIL, SESAGOA, NTPC, KOTAKBANK, ENGINERSIN, DRREDDY, APIL, BEL, NHPC and BEML will be announcing their Results.

On the Global front, in ASIA, Investors will be awaiting indications on China's economy. Samsung and other memory-chip makers will announce results; Japanese retail-sales and unemployment data are due as well. In EUROPE, investors will watch closely Sunday's summit of European Union leaders in Brussels as well as a second summit due to take place no later than Wednesday. Numerous European companies are also due to report earnings next week, including oil major BP, banking groups UBS and Deutsche Bank, and car makers Daimler, Fiat and Volkswagen. In US, earnings are expected from Caterpillar, 3M, and Boeing.

For the week, resistance for NIFTY comes at 5260 & 5320 levels. At the same time, 4900 & 4820 will act as major support levels.