Nifty Weekly Outlook (13th to 17th February 2012)

From 5325.85 to 5381.60, NIFTY gained almost 55.75 points and ended in Green last week on Friday (10^th February 2012) at 5381.60 gaining almost around 1.05% as compared to the last week’s closing of 5325.85. It has been a bull run for NIFTY since last six weeks, or say more than one month period from 4746.90 to 5381.60, registering an exorbitant growth of 13.37%. Many Mid Caps and Large Caps Stocks and Sectors took part in this rally, especially which were beaten down harshly. On Wednesday, NIFTY slipped almost 90 points from the day’s high level, as GDP Estimation was announced by the Government. India’s gross domestic product (GDP) is estimated to grow an annual 6.9 percent in the 2011/12 fiscal year. The estimated figures of 6.9 percent growth in 2011-12 is a three-year low, mainly due to a sharp slowdown in manufacturing, agriculture and mining sectors. On Thursday, NIFTY crossed the levels of 5400 in the last hour of trading due to robust opening of its European peers amid positive cues about the Greek debt talks. On Friday, again NIFTY witnessed a uncertain movement as IIP (Index of Industrial Production) Data for the month of December was announced in India. Pace of Growth slowed to 1.8% from 5.9% in November 2011. The Index of Industrial Production (IIP) recorded a sluggish 1.8% growth in December 2011, considerably weaker than the 8.2% growth in December 2010. BANKING, REALTY & INFRA, METAL & MINING, AUTO, CAPITAL GOODS and IT were the largest gainers during this rally. It made a high of 5427.75, whereas a low of 5322.95 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 northwards movement with uncertainty for whole of the week, it ended at 5381.60, after struggling a lot to close above the levels of 5400 on the closing basis.

Technically, NIFTY has made a White Doji Candlestick Pattern. The formation of this candlestick signals the presence of uncertainty in the markets and a tough fight between the Bulls and the Bears. It has been a six week winning streak for the markets, which means a period of more than a month. 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. NIFTY is now trading above the level of its 40-Days EMA of 5144.51and it resisted at the levels of its 100-Days SMA of 5410.67, however it made a high of 5427.75 for the week, but registered a close below it at 5381.60. 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 50.00% Extension level of 4887.26, which it was facing for more than a Extension Level of month period, which is now acting as its medium term support level. The level of 33.00% Extension Level of NIFTY of 5441.95 will now acting as a strong resistance for it to be crossed on the Closing Basis. In last week, the 100-Days SMA also acted as an immediate resistance for NIFTY to be crossed on the closing basis. 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 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 to 5050/4950. NIFTY crossed the level of 5220 with excellent spurt and even touched the level of 5427.75. 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. JAI CORP, SUNPHARMA, VIVIMED LABS, ENGINERSIN, SBIN, TANTIA CONSTRUCTIONS, HEIDELBERG CEMENT, UB HOLDINGS, RELMEDIA, LITL, CIPLA, MOTERSON SUMI, COALINDIA, GUJNRECOKE, WOCKHARDT, ESSEL PROPACK, SAIL, S KUMARS NATION, EXCEL INFOWAYS, MAN ALUMINIMU, CESC, PARSVNATH, PUNJLLOYD, HDIL, RENUKA, BOMDYEING, IOC, STEEL STRIPS, FCS SOFTWARE, CASTROL, GREAT OFFSHORE, UTV SOFTWARE, ANSALK HOUSING, BANG OVERSEAS, COX & KINGS, ASHTAVINAYAK, ICSA, REI AGRO, BL KASHYAP, IGL, EDUCOMP, TATAMOTORS, GRAPHITE INDIA, NESTLE, VOLTAS, IVRCL ASSETS, MAX INDIA, UNITECH, ABGSHIP, IVRCL, ALOKTEXT, TANLA SLOUTIONS and CRISIL will be announcing their results in INDIA.

BNP PARIBAS SA, PEUGEOT SA, RENAULT SA and LAFARGE SA will be coming out with its results in FRANCE. MAN SE, REPOWER SYSTEMS AG and PUMA SE will be announcing their results in GERMANY. THE GOODYESR TIRE &RUBBER CO, METLIFE INC, NVIDIA CORP, MARRIOTT INTERNATIONAL INC and GENERAL MOTORS CO 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.

On the Global front, in ASIA, Japan GDP and Australian unemployment are just two of the important economic indicators from the region next week. INDIA will be coming out with its Monthly Inflation Numbers for the month of January. In Europe, The Greek parliament is scheduled to vote on Sunday, and euro-zone finance ministers will meet on Wednesday to officially sign off the bailout deal. Nestle, BnP Paribas and SocGen will report earnings. In U.S., a possible decision on more funds for Greece, and data on U.S. housing starts will key U.S. market performance.

For the week, resistance for NIFTY comes at 5550 & 5620 levels. At the same time, 5250 & 5180 will act as major support levels.