Nifty Weekly Outlook (14th to 18th November 2011)

From 5284.20 to 5168.85, NIFTY lost almost 115.35 points and ended in Red last week on Friday (11^th November 2011) at 5168.85 losing almost around 2.23% as compared to the last week’s closing of 5284.20. Market traded only for three days last week. The whole week was like a roller coaster ride for NIFTY. On Tuesday NIFTY slipped due to weak and uncertain Clues from Italy and Greece. On Wednesday, NIFTY continued its slide on profit booking emerged in shares from banking sector during late morning session after Moody's Investor Service downgraded its outlook for India's banking system to "negative" from "stable". A weak trend in the European markets as Italian-German bond yield spreads widened to 500 basis points triggered further selling, pushing the bourses off the cliff in the last trading hour. On Friday too, NIFTY dipped to the week’s low of 5142.25 due to weak IIP (Index of Industrial Production) Data for the month of September, 2011. The IIP growth, which fell to a two-year low, slipped to 1.9% versus 4.1% in August. Manufacturing growth was at 2.1% as against 4.5% and mining growth was at -5.6% vs -3.4% in August. But again NIFTY held its southwards movement due to the weekly inflation numbers. For the week ended October 29, primary articles inflation reduced to 11.43% versus 12.03% (WoW). Likewise, food articles inflation too fell by 30 basis points to 11.81% versus 12.21% (WoW), while fuel group inflation remained unchanged at 14.5%. Q2 FY11 Results Season was a major factor for the movement witnessed in some of the Sectors and Stocks. BANKING & FINANCE, METAL, TEXTILE, CAPITAL GOODS and REALTY & INFRA were the major losers 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 resistance. Finally after witnessing a volatile and shaky movement for whole of the week, it ended at 5168.85.

Technically, NIFTY has made a Long Black Candlestick Pattern. If a look at Chart is taken, 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. NIFTY has breached the upper trendline marked from November, 2010. Once again the level of 5200 is acting as an important resistance for NIFTY. Another crucial Resistance for NIFTY lies at 5400 (on the closing basis). NIFTY is trading below its 40-Days EMA and 100-Days SMA of 5311.92 and 5423.30, respectively.

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 were trading according to the news flow in Europe, mainly in Italy and Greece. Most of the markets ended flat for the week.

FIIs (Foreign Institutional Investors) were the Net Buyers of Rs. 932.06 Crore while DIIs (Domestic Institutional Investors) were the Net Sellers of Rs. 1022.51 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. MLL, EVERONN, MANAKSIA, GSPL, MAX, ADANIENT, OILINDIA, AMARARAJA, GITANJALI, ARCHIES, CIPLA, BHEL, TATAMOTORS, TATAPOWER, STC INDIA, ABGSHIP, KRBL, TANLA, GMDCLTD, RUCHISOYA, SAREGAMA, FORTIS, HARRMALAYA, PATELENG, RAJESHEXPO, UCAL FUEL, GTL, PVP, FCS, STERLINBIO, BANG OVERSEAS, UNITECH, TECHM, GATI and SIEMENS  will be announcing their Results.

On the Global front, in ASIA, Focus shifts to Japan as three of its large banks are set to report earnings, and fourth-quarter figures for economic growth are due as well. Japan's central bank has a policy decision due too. In Europe, Investors are awaiting data on euro-zone economic growth for the third quarter due on Tuesday. They will also continue to watch developments in Italy. In US, Next week all eyes will be on progress on Italy budget measures, while fears over France emerge. Plus: earnings, October retail sales, industrial production data and the November Philly Fed.

For the week, resistance for NIFTY comes at 5320 & 5400 levels. At the same time, 5050 & 4980 will act as major support levels.