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MARKET OUTLOOK FOR THE WEEK: 14-11-2016

MARKET OUTLOOK FOR THE WEEK: 14-11-2016
November 14
02:52 2016

We saw highly volatile movements last week, and during period Nifty made a low at 8005 but managed to close at 8296 on Friday.  The current volatility may continue some more time because of uncertainties over the newly elected US Presidents foreign policies, more spending which may lift inflation and subsequent move by Fed to increase interest rates.  On Friday global bonds markets lost more than $1 trillion.  The Mexican currency PESO hits record low on concerns of Trump’s foreign policies.

Nifty has support at 8200 and 8127.  A decisive move below these two levels can cause further sell-off and there are possibilities that Nifty could test 8000.   Resistances for the Nifty are at 8520, 8574 and 8600.  Closing above 8600 for two days consecutively, then we can assume further uptrend.  But chances are remote. India VIX is on a rising mode and on Friday it closed at 17.36.  Raising India VIX is a concern now. Both speculative positions long and short should be lightening up because of the volatility.  Writing options also has inherited risks.

Banking Nifty is slightly over bought and we witnessed selling across the banking sector on Friday and the trend may continue for some more time.  But long term trends are still positive and therefore if there is major correction one can take long positions in selective private sector banking stocks.  Banking Nifty has support at 19500 and 19000. Major resistance for the Banking Nifty are at 20048 and 20204. On November 11 and November 12 lots of companies are expected to come out with numbers.  From Monday next week on wards companies like Auro Pharma, Chennai Petro, Corp Bank, HEIDELBERG, ITDC, Kalpatpower, NDTV, Phoenix Ltd, AIAENG, Balramchini, CONCOR, HPCL, NHPC etc.

On the Macro front US will report Retail Sales, Continuing Jobless claim and Inflation. From the EURO side data’s like Retail Sales, Inflation, Unemployment rate, GDP Growth rate, ECB Non Monetary Policy meetings and Balance of Trade. WPI food, WPI Manufacturing, WPI Inflation, Balance of Trade and Inflation rates will be released next week from India.

IT Index is slowly and steadily entering into the oversold region, and which can give minor bounce back on Tuesday.  But uncertainties over the business and foreign policies of the new US President it is prudent to stay sidelines for some more time.  Nifty IT index has support at 9304 and 8918.

 

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ALEX MATHEWS

ALEX MATHEWS

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