Nifty Weekly Outlook (09th to 13th January 2012)

From 4624.30 to 4746.90, NIFTY gained almost 122.60 points and ended in Green last week on Friday (06^th January 2012) at 4746.90 gaining almost around 2.65% as compared to the last week’s closing of 4624.30. It was a Six Days Trading Week for Dalal Street. The week was fully volatile the traders, the only day which was eventful was Tuesday, a Gap Up Opening of almost 40 Points was witnessed and it gained almost 100 points for the day. For whole of the week, NIFTY tried its very best to touch and cross the level of 4800, but it could not. It could mark a high of 4794.90 for the week. NIFTY kept trading between 4600-4800; however, for the week it marked a low of 4588.05 on the first trading day itself and recovered from the low on that very day. Stock specific and Sector specific buying was witnessed as Results Season is in the offing and also many of them witnessed Buying at bottom levels.  Finally after witnessing a volatile and shaky movement for whole of the week, it ended at 4746.90.

Technically, NIFTY has made a Long White 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 facing strong resistance of its 38.20% Retracement level of 4887.26. On the other hand, it is taking strong support of its 50.00% Retracement level of 4438.98. 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 4880 is acting as an important resistance for NIFTY. Another crucial Resistance for NIFTY lies at 5000 (on the closing basis). NIFTY is trading below its 40-Days EMA and 100-Days SMA of 5134.90 and 5400.60, respectively.

Unless, NIFTY gives a positive closing above the levels of 4880, 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.

On the Global front, in ASIA, U.S. Treasury Secretary's mission to China will focus on trade between the two nations. Also on tap for the markets are China's consumer price index figures, and the Bank of Korea will take up a monetary policy decision. In Europe and US, the season for quarterly earnings starts off with results from Alcoa, with J.P. Morgan's report capping the week. Also, Angela Merkel and Nicolas Sarkozy meet and the hordes descend on CES, where new products and initiatives from Intel and Google are to be unveiled. Next week will be crucial for INDIA too, as results season will be starting with INFY announcing its results on 12^th January, 2012 and also INDIA will be coming out with its IIP (Index of Industrial Production) Data for the month of November, 2011.

 For the week, resistance for NIFTY comes at 4850 & 4950 levels. At the same time, 4520 & 4450 will act as major support levels.