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MARKET OUTLOOK FOR THE WEEK: 16-01-2017

MARKET OUTLOOK FOR THE WEEK: 16-01-2017
January 16
04:42 2017

Nifty closed positively on Friday above 8400 and it is likely to open with a positive gap up on Monday due to strong closing of foreign markets. Nifty faces resistances at 8443 and 8450 levels in the short term and it may get good support at 8374 and 8315 levels. Beginning of the week we can expect sideways movements and consolidation after a firm opening on Monday, later that we can expect sharp one sided movements. If that happens then Nifty may move above 8500 and at the lower end it will get good support at 8283. Price corrections can be utilized to buy front line stocks because monthly charts are suggesting further uptrend to resume ahead of the budget. It is not advisable to write options in the near month and far month, especially February series because implied volatility of the Nifty options can jump up ahead of the budget which will have high risk of price move.

As expected metal stocks performed well in the last week, the sector is positive but it is slightly overbought. Nifty metal index has support at 2917 and 2850. It will have resistance at 3016. Like Nifty price declines can be utilized to buy metal stocks due to higher demand. IT stocks take a toll last week especially after the quarterly earnings of TCS and Infosys. The front line IT stocks will face more sell-off due to technical reasons and fundamental reasons, one should wait some more time to get lower prices. Nifty IT index has support at 10150 and 10014. Nifty IT index has resistance at 10263. IT is yet to reach in the oversold reason will keep the IT stocks under pressure.

Last week from the domestic front Industrial production data came out, it surged 13 month high at 5.7% in November. Manufacturing production also jumped 5.5%. Mining rebounded 3.9% after 3 months of poor performance. Monthly inflation based consumer price index dipped 25 month low of 3.41% in December also gave optimism among investors.

Next week Retail sales, Inflation rate, Industrial production and initial jobless claims are due from US and Inflation, Balance of trade and unemployment rate are expected from the Euro zone. WPI Manufacturing, WPI Food, WPI Fuel, WPI inflation numbers will be announced. Quarterly earnings like Reliance and Axis Bank and lots of mid-cap and small-cap stocks will unveil their quarterly earnings next week. So it is important to watch out for the numbers before investing in to these companies stocks.

 

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ALEX MATHEWS

ALEX MATHEWS

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