Weekly Stock Market Outlook 12Sep11

 

 

 

On a relative basis, Sensex`s performance was in line with the global markets. In the next week, there is the IIP data and monetary policy meeting to watch out for. Markets could come under pressure depending upon the outcome of the meet. The RBI Guv`s speech would be closely followed for any signals of a pause in the rate tightening cycle.  Post the gains in the past two weeks, we expect markets to consolidate. Global economy has several issues to contend with in the near term. For retail investors, we advise a stock-specific approach at this juncture.``

 

 

Next week is full of major domestic events, with IIP, Inflation, RBI meet and Advance Tax data being among the important ones. It would be wise to remain cautious and be stock specific.``

 

 

The Nifty is currently trading below an important medium term moving average. Also, it is confirmed by medium term indicator which is also confirming this bearish possibility. Due to this, any declines could head towards the lower end of the trend channel, which is currently at 4,700. Hence, our view remains skewed towards weakness in the medium term.``

 

 

The Nifty is currently trading below an important medium term moving average. Also, it is confirmed by medium term indicator which is also confirming this bearish possibility. Due to this, any declines could head towards the lower end of the trend channel, which is currently at 4,700. Hence, our view remains skewed towards weakness in the medium term.``

 

NSE Midcap:

 

It is clearly implied looking at the charts that the trend of the index is showing formations of a lower top-bottom. This indicates that the medium term trend of the index is weak. Also, the supporting technical indicators are exhibiting a negative crossover and important medium term moving average confirms the bearish trend of the index. We see further downsides in the index in the medium term.

 

Sectoral outlook:

 

BSE PSU

 

Advances for the last two weeks have resulted in the BSE PSU advancing towards our mentioned resistance level of 7,800. Further upmove can only continue above 7,800. On the downside, a breakdown below 7,700 can result in a reversal of trend.

 

BSE Bankex

 

The structure of the BSE Bankex indicates that a short term correction could have commenced.

 

BSE IT

 

BSE IT continues to consolidate. The sideways to positive move for the last few weeks suggests that a breakdown cannot be ruled out in the near future. Such a breakdown remains a possibility as long as 5,200 doesn`t get breached on the upside.

 

BSE Cap Goods

 

The BSE Capital Goods has seen a strong trending upmove for the last few weeks. The trend continues to have positive bias.

 

BSE Auto

 

BSE Auto`s short term uptrend remains intact. There is a fair probability for this index to consolidate after a strong upmove from 8,000 level. Strong support on the downside now exists at 8,600 followed by 8,400.

 

Global Equities

 

S & P 500

 

S&P 500 moved in line with our view for last week. Strong headwinds exists for it on the upside around the zone of 1,225-1,250. A breakdown below 1,150 can lead to a change of trend and declines towards 1,100.

 

Shanghai SE Composite

 

SSE continues to consolidate in the short term. The level of 2,450 is a strong area of support on the downside. Any positive development should only emerge beyond 2,600.

 

Hang Seng

 

Hang Seng has continued to move sideways with a positive bias. Strong headwinds exists at higher levels and a breakdown below 19250 could lead to a change of trend.

 

Nikkei

 

Nikkei has seen a retracement from the high of around 9,100 which was our mentioned level of resistance. The trend still remains down and further continuation of weakness remains a good possibility.

 

FTSE

 

The sideways to positive move in FTSE in the last few weeks suggest of a pull back .Any further upsides can see stiff resistance at around 5500 levels post which a resumption of downtrend could happen.

 

MSCI - EMI

 

MSCI EMI has continued to see sideways to positive move as per our view. Resistance on the upside exists at 1050. A breakdown below 975 however can lead to a change of trend.

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

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Stock Market Outlook 09Sep11

We expect markets to be sideways today. The support for Sensex remains at 17,032/16,899 levels and resistance at 17,254/17,343 levels. Nifty is having support at 5,111/5,069 while resistance is at 5,182/5,211 levels.

 

With most of the Asian indices trading flat, the Nifty is expected to exhibit a similar move. Most of F&O indicators continue to indicate positive sentiments prevailing. The index has a resistance placed at around the 5,180-5,200 levels. Supports are placed at around the 5,060-5,080 levels,``

 

Nifty September futures open interest declined to 26.19 million shares from 26.57 million shares. The cost of carry increased to 0.59% from -2.41% (excluding dividend impact), suggesting closure of short positions. We believe any upward movement in the Nifty would trigger further short covering.

 

Accumulation among Nifty September options continued to accumulate in higher strikes in comparison to maximum concentrated strikes. Nifty September 5,100 put options (cumulative open interest of 3.61 million shares) accumulated close to 0.67 million shares in comparison to closure of 0.11 million shares observed in the maximum concentrated strike of 4,700 (cumulative open interest of 7.63 million shares). Nifty September 5,000 put options (cumulative open interest of 7.24 million shares) accumulated close to 0.55 million shares in open interest.

 

Among Nifty September call options, maximum accumulation of 0.59 million shares was observed in strike of 5,400 (cumulative open interest of 5.57 million shares) in comparison to 0.01 million addition in maximum concentrated strike of 5,200 (cumulative open interest of 5.67 million shares). Options data clearly indicates an occurrence of an upward shift in accumulation pattern.

 

The indices have closed at the upper end of the intraday range as the bulls were able to offer support at lower levels during the session. The intraday range specified for the Nifty between the 5175 / 5075 held as the Nifty retraced trended within these levels, thereby validating our intraday counts. The coming session is likely to witness resistance at the 5200 levels on advances. Support is likely at the 5100 levels. The bullish pivot for the session is likely at the 5150 levels above which the Nifty must stay throughout the session. The bearish pivot i

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

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Stock Market Outlook 08Sep11

Now we could see some more upside between 5,120-5,200 in Nifty… Strong support is at 5,000. The market unfolded as expected and has closed right on our resistance of 5,120...,``

 

``Technically, the market still looks up and our resistance of 5,200 is still valid and support at 5,085. The support for the Nifty is at 5,085 and resistance at 5,200,`` he added.

 

The indices have closed at the upper end of the intraday range as the bulls were able to offer support at lower levels during the session. The intraday range specified for the Nifty between the 5150 / 5000 held as the Nifty retraced from the 5154 levels, thereby validating our intraday counts. The coming session is likely to witness resistance at the 5175 levels on advances. Support is likely at the 5075 levels. The bullish pivot for the session is likely at the 5125 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5100 levels below which declines may occur. Traders must watch these levels for signs of trend determination in the coming session.

 

The daily candle chart of the Nifty shows a smaller bodied bullish candle with a sizable upper shadow - indicating some selling pressure at higher levels. As the Nifty nears the 5200 levels, we anticipate short term profit taking pressure to accelerate. Staying above the 5125 level with higher volumes and open interest will see the bulls extending their intraday domination over the bears. The Nifty sustaining below the 5100 levels may trigger a fresh bout of declines.

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

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bazaaredge.com Stock Market Outlook 07Sep11

The key benchmark indices surged to strike intraday high in late trade on

aggressive bargain hunting in index heavyweights. Volatility was high across

the globe with European markets trading firm after initial hiccup while select

Asian markets turned positive after initial declines. US index futures also cut

losses. A setback in global markets on worries of a recession in the US and the

ongoing eurozone debt crisis had weighed on early sentiment for the second

day. The Sensex rebounded into the green in afternoon trades, as IT shares

recovered. The Sensex and Nifty closed with gains of 0.9% each. The mid-cap

and small-cap indices logged gains of 0.6% and 0.7%, respectively. Among the

front runners, RIL, M&M, JP Associates, Jindal Steel and Sterlite gained 2-4%,

while DLF, Sun Pharma, Bharti Airtel, Bajaj Auto and NTPC lost 1-4%. Among

mid caps, Hexaware Tech, Educomp Sol, Polaris Soft, Amtek Auto and Gujarat

State Fert gained 6-8%, while HDIL, TV18 Broadcast, Dewan Housing, Federal

Bank and HT Media lost 2-3%.

Markets Today

The trend deciding level for the day is 16,749/5,027 levels. If NIFTY trades

above this level during the first half-an-hour of trade then we may witness a

further rally up to 17,009–17,155/5,111–5,157 levels. However, if NIFTY

trades below 16,749/5,027 levels for the first half-an-hour of trade then it may

correct up to 16,602–16,342/4,981–4,897 levels.

 

The indices have closed at the upper end of the intraday range as the bulls were able to offer support at lower levels during the session. The intraday range specified for the Nifty between the 5060 / 4915 was overcome marginally as the Nifty tested the 5073 levels, thereby exceeding our intraday counts on the upside. The coming session is likely to witness resistance at the 5150 levels on advances. Support is likely at the 5000 levels. The bullish pivot for the session is likely at the 5025 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 4990 levels below which declines may occur. Traders must watch these levels for signs of trend determination in the coming session.

 

The daily candle chart of the Nifty shows a larger bodied bullish candle corresponding with a bullish outside day formation on the western bar charts with positive implications, indicating the bulls overcoming the bears at lower levels. Staying above the 5025 level with higher volumes and open interest will see the bulls retaining their intraday domination over the bears. The Nifty sustaining below the 4990 levels may trigger a fresh bout of declines

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

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bazaaredge.com Stock Market Outlook 05Sep11

Sell off across Europe remains a cause of concern, heavy weight DAX breaks into a new 52 week low and remains the most vulnerable; 5000-5150 remain critical long term supports. 4,875 remains a crucial support for Nifty, any break and close below it would mean that the lows at 4,720 would get tested,``

 

``DJIA a break and close below 10900 would mean that downsides have resumed and the recent pullback got over around the 200 DEMA. DXY delicately poised, weekly setups look encouraging as momentum picks up, a daily close past 75 should open up upsides till 77 which is the 55 WEMA,`` he added.

 

``Gold prices within striking distance of 1,911 highs, setups still look encouraging and a dash for the psychological USD 2,000 mark looks possible,``

 

``Sesa Goa (stop 218), RIL, Renuka Sugar stocks are looking positive for short term. Whereas, BSE Healthcare (stop 6,030 closing basis), ITC looks negative.`

 

The indices have closed at the upper end of the intraday range as the bulls were able to offer support at lower levels during the session. The intraday range specified for the Nifty between the 5120 / 4960 held as the Nifty bounced from the 4964 levels, thereby validating our intraday counts. The coming session is likely to witness resistance at the 5060 levels on advances above which the 5120 levels maybe tested (a low probability event as of now). Support is likely at the 4975 levels below which the 4915 levels maybe tested. The bullish pivot for the session is likely at the 5010 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 4985 levels below which declines may occur. Traders must watch these levels for signs of trend determination in the coming session.

 

The daily candle chart of the Nifty shows a smaller bodied bullish hammer, indicating the bulls cushioning the falls to a degree. Staying above the 5010 level with higher volumes and open interest will see the bulls getting a chance to markets higher intraday. The Nifty sustaining below the 4985 levels may trigger a fresh bout of declines.

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

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bazaaredge.com Stock Market Outlook 05Sep11

Most of the global indices are trading in the negative territory. The Nifty is expected to open on a weak note. The index has a strong support placed at around the 4,950-4,970 levels. With positive F&O data continue to prevail, a bounce back from support levels cannot be ruled out,``

 

Nifty September futures open interest increased to 24.37 million shares from 22.86 million shares last Friday. The current open interest stands highest in last 2 series. Most of the accumulation seems to be on long side as indicated by the FIIs data. FIIs remained net buyers to the tune of Rs 5.39 billion along with an increase in open interest to 0.55 million contracts from 0.51 million contracts. Increased long accumulation suggests positive sentiments prevailing in the street.

 

Nifty OTM put strikes continued to add open interest. Maximum accumulation was seen in 4,700 strikes wherein open interest increased to 7.53 million shares from 6.40 million shares. Open interest in 4,400 strike rose to 4.51 million shares from 3.52 million shares. Among call options, maximum accumulation was observed in 5,400 strikes wherein open interest increased to 4.12 million shares from 3.31 million shares. Increased accumulation in OTM strikes along with an increase in implied volatility suggests higher probability of large moves in either direction.

 

Technically, the domestic markets are showing signs of consolidating upwards after a sharp decline a fortnight ago. The headline indices have rallied off a channel bottom support and the market internals have been supportive of the upmove The weekly range advocated for the Nifty between the 5150 / 4575 levels have held as the benchmark trended within these levels. The coming week is likely to witness a range of 5300 on the upside as long as the Nifty stays above the bullish pivot at the 5000 mark. In case of declines, the Nifty is likely to test a level of 4600 as long as the bears keep the Nifty below the 4925 levels. Continue to hold a buy view on the Nifty via the ETF ( Nifty BeES) route as the pullback may have some more steam.

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

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Weekly Stock Market Outlook 05Sep11

 

 

``The monthly jobs report would be announced in the US today. Any significant increase in unemployment rate may attract selling pressure. There are no major market moving events in the next week. Though valuations are reasonable, it remains to be seen whether the rally sustains in the next week given pressure points like firm Crude prices, high inflation and softening of economic growth. In current times of volatility, we continue to recommend stocks with strong balance sheet, clean corporate governance track record and reasonable visibility of growth. For retail investors it can be good time to build a portfolio of quality stocks.``

 

 

Fundamental view: At the current level of 16,835, the Sensex trades at a PE of 14.58x FY12E earnings estimate and 12.22x FY13E earnings estimate. At 14.58x, we trade below average valuations of 15.4x 1 year forward earnings. However, with an aggressive 125bps hike in last four months by RBI and possibly more to come, a slowdown in growth is likely especially when world economy is turning weak. Against the overall macro scenario, earnings expectations for FY12 and FY13 (which have already seen downgrades), could see further cuts. In the short term, volatility will be high and therefore defensives are preferred over rate cyclicals

 

The underlying theme for our stock selection is strong visibility of earnings and cash flows. In the short term, volatility will be very high and hence a bottom up approach will work better. Therefore, we prefer stocks with strong management, strong cash flows and high earnings visibility. Sector wise, we believe risk reward remains heavily stacked in favor of defensive sectors. We thus continue to maintain our bullish stance on consumers, pharma and utilities. Simultaneously, the inflation growth dynamics are unfavorable for rat sensitive cyclicals. With the overhang of a persisting high interest rate regime, we are negative on financials, capital goods, construction, and real estate.

 

Technical view: On the daily chart, RSI continues to move northwards and weekly candle too has made a positive formation. Beside this on the hourly chart Nifty continues to formed higher top and higher bottom. Thus now on upside Nifty has strong resistance at 5095 and above that 5211 which are 38.20% and 50% retracement level of the recent fall from 5702 to 4720. However downside in near term now Nifty has support at 4966 and below that in medium term Nifty has support at 4777 levels.

 

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Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report

 

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