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MARKET OUTLOOK FOR THE WEEK: 12-12-2016

MARKET OUTLOOK FOR THE WEEK: 12-12-2016
December 11
17:38 2016

Nifty closed at 8261 and it is well above the crucial resistance level at 8248 gives further hope for the investors.  The immediate resistances at 8279 and 8305, after testing these two resistances nifty may consolidate.  During consolidation nifty may find support at 8200 and 8123. After consolidation nifty can scale up further towards 8400 and even more.  During the last week RBI kept the interest rates unchanged.  Nikki India Service Business activity index dropped in the month of November towards 46.7 from 54.50.  European Central Bank decided to continue with its bond purchase programme, but the amount will be slightly lower than the previous bond purchases.  Global equity market positive cues also supported our markets.  Importantly the pace of selling by both domestic and international investors has come down.  But retail investors are still staying sidelines to get further positives cues.  Trading volumes are on a declining mode suggesting lack of confidence among the investors on the current market situation.

Firm crude price will push up demand for oil producing companies stocks.   Banking stocks can also move up in the short term, banking Nifty gas resistances at 18841 and 18970.  The support lies at 18500 and 18412.  Both India VIX and S&P 500 VIX also on a declining mode suggesting firm market outlook.  If Nifty manages to stay above 8248 for more than a week then we can expect sharp upside breakout.

Nifty metal index is also looking very strong; it has resistances at 2898 and 2947.  Supports for the metal index are 2816 and 2706.  One should be very careful while initiating very large open positions because of FED’s meeting.  If there is a sharp increase in the interest rate by US FED then heavy sell-off can be witnessed in the commodity stocks.  Nifty IT index is showing minor uptrend and it has support at 9778 and resistance at 10264.  The daily charts and monthly charts are giving buying indications; small long positions can be initiated at every decline in IT index.

Many mid-cap and small cap companies are coming out with earnings next week are Alok Tex, Amtek Auto, Bajaj Hind, Coal India, HDIL, Hind Copper, Prism Cem, Anant Raj, Educomp, ESS DEE, Gitanjali, Man Inds, MTNL, NALCO, Patel Eng, Ruchi Soy, TVS SRICHAK, J&K Bank etc.

On the macro front US retail sales, Industrial Production, Manufacturing production and core inflation rate are expected next week.  Inflation, Industrial Production, Current Account, Markit Manufacturing PMI, Markit Service PMI and unemployment rate are due from Euro zone.

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ALEX MATHEWS

ALEX MATHEWS

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