Nifty Weekly Outlook (12th to 16th December 2011)

From 5050.15 to 4866.70, NIFTY lost almost 183.45 points and ended in Red last week on Friday (09^th December 2011) at 4866.70 losing almost around 3.77% as compared to the last week’s closing of 5050.15. It was a Four Days Trading Session for Dalal Street. The last two days have been disappointing. Stocks ended the past week in rallying mode, after most of the European Union's 27 leaders agreed to a framework for a closer fiscal union that would allow for a central budget authority and sanctions if budgets aren't balanced. Britain, not a member of the smaller group of euro zone countries, refused to support the plan, but all of the countries using the euro are expected to proceed. Uncertainty kept its presence from the starting of the week, and NIFTY kept testing the mark of 5100, it marked a high of 5099.25 for the week, but could not cross the level of 5100. On Thursday’s trading session, markets took a deep knock and dipped harshly, due to uncertainty looming over Europe’s Debt Crisis. For the week, NIFTY marked a low of 4841.75. REALTY & INFRA, CAPITAL GOODS and AUTO were the laggards for the week. Finally after witnessing a volatile and shaky movement for whole of the week, it ended at 4866.70.

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 4841.75, however it closed just below this level at 4866.70 for the week. NIFTY is trading much below the trendline marked from November, 2010, now acting as a good resistance level for it on Closing Basis. 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 5234.44 and 5412.51, respectively.

Unless, NIFTY gives a positive closing above the levels of 5250, 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 Buyers of Rs. 59.24 Crore while DIIs (Domestic Institutional Investors) were the Net Sellers of Rs. 234.74 Crore, in Cash Segment for the last week.

On the Global front, in ASIA, Economic data from China and Japan will dominate the calendar in the coming week, with Japan's quarterly tankan survey and HSBC's preliminary monthly manufacturing survey the two biggest headlines. In Europe and US, Markets will bring reaction to the latest from Europe, retail sales and jobs data.

For the week, resistance for NIFTY comes at 5130 & 5220 levels. At the same time, 4720 & 4650 will act as major support levels.