Nifty Weekly Outlook (21st to 25th November 2011)

From 5168.85 to 4905.80, NIFTY lost almost 263.05 points and ended in Red last week on Friday (18^th November 2011) at 4905.80 losing almost around 5.36% as compared to the last week’s closing of 5168.85. It was a Bloodbath for the whole week on the Dalal Street. The whole week was like a roller coaster ride for NIFTY. Since, Monday NIFTY kept on diving lower and lower for the whole week only due to Uncertain Cues and News Flows from the European region. There was not a single positive cue to move the market into positive terrain. Panic Selloff in Mid Cap Stocks also took markets to the week’s low of 4837.95. took a hit after a Gap Up Opening due to weak European markets and soaring Inflation for the month of October (above 9%) made investors edgy. REALTY & INFRA, METAL, CAPITAL GOODS, AUTO and BANKING& FINANCE were the laggards for the week. Although for the week NIFTY made a high of 5228.90, but it kept on slipping and breaching its weekly support levels of 5050 and 4980 too very swiftly. European Debt Crisis fear spread to the countries like Austria, Hungary too. Italy, Greece and Spain are in the worst conditions as of now also their 10-Year Bond Yield is touching new and unbearable heights pinching more. FITCH also said in a report that the US Banks will have a Contagion Effect if the European Countries soon do not solve their problem. Once, again markets feared the Investors to enter lows of stocks especially REALTY & INFRA (most of them marked new life time low). 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. Last week NIFTY breached this support by making a low of 4837.95, however it closed just above this level at 4905.80 for the week. NIFTY has breached the upper trendline marked from November, 2010 witnessing a huge selloff for the entire week. 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 5292.10 and 5422.48, 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 again reverted from their resistances as in the case of Indian Markets. Deepening fear of European Debt Crisis was the major reason of this Sell Off all around the Globe.

FIIs (Foreign Institutional Investors) were the Net Sellers of Rs. 1643.86 Crore in Cash Segment for the last week.

On the Global front, in ASIA, Japan swung back to having a trade surplus in September, however signs of slowdown are expected in its October trade data. In China, HSBC's "flash PMI" comes out, a non-government view of China's economy. In Europe, sovereign debt crisis will remain in focus for investors next week, with attention turning to initial moves by the new government in Italy to cut debt and boost growth. Spain, which holds a national election on Sunday, will also be in the spotlight with investors eager to see a new government take steps to cool the crisis and bring down bond yields. With earnings season winding down, and U.S. markets closed on Thursday, European markets are expected to be subdued in the later part of the week. In US, investors' eyes next week will be on European news, including Spain's parliamentary election on Sunday, followed by U.S. data releases, and earnings from Hewlett-Packard and Deere & Co.

For the week, resistance for NIFTY comes at 5230 & 5350 levels. At the same time, 4750 & 4650 will act as major support levels.