Nifty Weekly Outlook (30th January to 03rd February 2012)

From 5048.60 to 5204.70, NIFTY gained almost 156.10 points and ended in Green last week on Friday (27^th January 2012) at 5204.70 gaining almost around 3.10% as compared to the last week’s closing of 5048.60. It has been a bull run for NIFTY since last four weeks, or say last one month period from 4746.90 to 5204.70, registering an exorbitant growth of 9.64%. Many Mid Caps and Large Caps Stocks and Sectors took part in this rally, especially which were beaten down harshly. BANKING, REALTY & INFRA, METAL & MINING, AUTO, CAPITAL GOODS were the largest gainers during this rally. Positive Hopes raised in the European Markets and also a bit of Dovish View of RBI (Reserve Bank of India) in domestic markets helped the markets to register a gain for the least week too. RBI cut the CRR (Cash Reserve Ratio) by 50 Bps (Basis Points) in its Credit Policy on Tuesday, which ran the REALTY & INFRA, BANKING & FINANCE, AUTO, METAL & MINING and CAPITAL GOODS Sectors. NIFTY crossed all its important resistances of 5120/5200 very swiftly. It made a high of 5217.00, whereas a low of 5021.35 for the week. Stock specific and Sector specific buying was witnessed as Results Season has arrived and also many of them witnessed Buying at bottom levels. Finally after witnessing a purely northwards movement for whole of the week, it ended at 5204.70.

Technically, NIFTY has made a Long White Candlestick Pattern, confirming the pattern formed the last week of Bullish Three White Soldiers Candlestick Pattern. The Long White Candlestick Pattern formed is indicative of a strong reversal in the market. Bears are now forced to cover short positions. 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 still intact. But last week NIFTY crossed the level of its 40-Days EMA of 5122.43 on the closing basis and is still trading below its 100-Days SMA of 5405.85, which may also act as a next strong physiological resistance level for it. 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), of which NIFTY has crossed the strong resistance level of its 38.20% Extension level of 4887.26, which it was facing for more than a month period. On the other hand, it is taking an immediate support of 4635 level and also a strong support of its 50.00% Retracement level of 4438.98. NIFTY has also crossed the trendline marked from November, 2010 on closing basis, which was till now acting as a good resistance level for it. Now, this trendline marked will act as an immediate support level for NIFTY, which comes at 4980.

As mentioned earlier, NIFTY has now crossed all the resistance levels and also closed above the level of 5200. It may witness a pause at the level of 5220 to move ahead for the levels of 5300/5440 or may also revert from this level. Investors are suggested to take part in this rally through bottom fishing in the beaten down sectors and stocks and also Traders are suggested to trade with the market trend in by following Strict Stop Losses.

Quarterly Results Season is on the move in all the financial markets around the globe. Some of the important results to be announced next week in different markets are being presented here. IL&FS, TAJ GVK HOTELS, NOIDA TOLL, INGERSOLL RAND, NOVARTIS INDIA, KANSAI NEROLAC, ORIENTAL BANK, EID PARRY, HAVELLS INDIA, ZEE LEARN, USHA MARTIN, JAGRAN PRAKASHAN, ICICI BANK, CENTRAL BANK, GATEWAY DISTRIPARKS, IDBI BANK,  CROMPTON GREAVES, DABUR INDIA, UNITED BANK, SIEMENS, SHOPPERS STOP, TITAN INDUSTRIES, BERGER PAINTS, HCL INFO, NMDC, PTC INDIA, PNB, DELTA CORP, KALE CONSULTANT, PRESTIGE ESTATE, TIDE WATER OIL, WELSPUN CORP, TAMILNADU PETROLEUM, EIH, MANAPPURAM FINANCE, ANDHRA BANK, ESSAR PORTS, ESCORTS, HEXAWARE TECHNOLOGIES, PIRAMAL LIFE, ONGC, CORPORATION BANK, THERMAX, CHENNAI PETRO, PIRAMAL HEALTH, MADRAS CEMENT, PRAKASH INDUSTRIES, SREI INFRA, ROLTA, DR REDDYS LAB, CONTAINER CORP, HIND COPPER, TATA TELESERVICE, TAMIL NEWSPRINT and EVEREST KANTO will be announcing their results in INDIA.

DEUTSCHE BANK AG will be coming out with its results in GERMANY. VEDANTA RESOURCES PLC, XSTRATA PLC, UNILEVER PLC, ASTRA ZENECA PLC and BT GROUP PLC will be announcing their results in U.K. MCGRAW-HILL COMPANIES INC, ELI LILLY AND CO, PFIZER INC, EXXON MOBIL CORP, AMAZON.COM INC, BERKSHIRE HILLS BANCORP INC, WHIRLPOOL CORP, HERSHEY CO, TUPPERWARE BRANDS CORP, ELECTRONIC ARTS INC, HAWKINS INC, SARA LEE CORP, VIACOM INC, KELLOG CO and MASTERCARD INC will be coming out with their results in U.S.

If a look at International Markets is taken, all the Markets around the Globe posted good gains and moved above their respective resistance levels, the same was imitated by the Indian Markets too. Still the deepening fear of European Debt Crisis has spread uncertainty in the markets all around the Globe.

FIIs (Foreign Institutional Investors) were the Net Buyers of Rs. 3129.66 Crore while DIIs (Domestic Institutional Investors) were the Net Sellers of Rs. 2121.59 Crore, in Cash Segment for the last week.

On the Global front, in ASIA, investors will find financial results front and center: Sony will dominate early, while later attention will turn to Panasonic, with both reports expected to show the impact of a weaker dollar and natural disasters, including the quake and tsunami in Japan and flooding in Thailand. Results from Toshiba, Sharp and Hitachi are also due. In Europe, job growth and fiscal consolidation will be in focus when European leaders meet in Brussels. Earnings report from banks and drug makers will also draw investor attention. In U.S., a new month begins with a barrage of data, from manufacturing surveys to unemployment. Markets also will absorb quarterly results from Exxon Mobil, Pfizer, UPS, Amazon and more. Plus, Facebook might make a long-awaited IPO filing.

For the week, resistance for NIFTY comes at 5320 & 5440 levels. At the same time, 5120 & 5050 will act as major support levels.