Nifty Weekly Outlook (08th to 11th November 2011)

From 5360.70 to 5284.20, NIFTY lost almost 76.50 points and ended in Red last week on Friday (04^th November 2011) at 5284.20 losing almost around 1.45% as compared to the last week’s closing of 5360.70. For whole of the week, NIFTY registered a strong opening due to approval of European debt Deal, but in the rest of the week, it couldn’t maintain the strength and kept on slipping with extreme volatility. Prime Minister George Papandreou’s shock decision to call a referendum on Greece’s bailout drew veiled threats from Germany and hammered markets edgy over the euro zone crisis. It was more of a Greece news flow driven market the last week all over the Globe, as there was no other trigger for the Markets. 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. For the week, NIFTY made a low of 5201.85 and did not breach the level of 5200. Finally after witnessing a weak and range bound movement for whole of the week, it ended at 5284.20.

Technically, NIFTY has made a Black Candlestick Pattern, with a longer lower shadow having the same length as of candle’s body. If a look at chart is taken, NIFTY has crossed the range in which it was moving since a long time. 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 breached its 23.60% level of 5441.92 earlier and is now again heading towards it. 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. NIFTY has crossed its earlier resistance level of 5200 successfully, which is now acting as its strong support level. Now, 5400 is a Crucial Resistance for NIFTY to cross on the closing basis. NIFTY is trading below its 40-Days EMA and 100-Days SMA of 5319.25 and 5422.79, respectively. It crossed the 40-Days EMA, but closed much below it for the week.

Unless, NIFTY gives a positive closing above the levels of 5450, 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) were the Net Buyers of Rs. 474.41 Crore while DIIs (Domestic Institutional Investors) were the Net Sellers of Rs. 785.16 Crore, 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. IDFC, ABB, AUROPHARMA, BANKINDIA, OPTO CIRCUITS, ABAN, BOSCH, PIDILITEIND, RPOWER, APTECHT, NEYVELILIG, BOMDYEING, HINDOILEXP, IOC, APOLLOTYRE, JSWENERGY, RANBAXY, VOLTAS, SRTRANSFIN, TATACOMM, HANUNG, CESC, BHRATFORG, LUPIN, GMRINFRA, MOSERBAER, HINDCOPPER, JSW ISPAT STEEL, HINDALCO, PANTALOONR, GVKPIL, RELMEDIA, GTL, TATASTEEL, DLF, SATYAMCOMP, TWL, DREDGCORP, MUNDRAPORT, ADANIPOWER, RELCAPITAL, GAMMON INDIA, LITL, HDIL, JETAIRWAYS, GESHIP, SRF, UTVSOFT, FINANTECH, GAMMON INFRA and SPICEJET will be announcing their Results.

On the Global front, in ASIA, Chinese inflation data and quarterly results from Toyota Motor may stand out in trading next week. In Europe, The Bank of England will announce its monetary-policy decision on Thursday. Investors will also watch closely developments in Greece and Italy. In US, Monday markets will likely react to Greek PM Papandreou's confidence vote slated for after the Friday close. Plus, Italy will likely be a focus next week. Earnings to watch for include Cisco, Disney and Nvidia.

For the week, resistance for NIFTY comes at 5420 & 5500 levels. At the same time, 5200 & 5120 will act as major support levels.