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MARKET OUTLOOK FOR THE WEEK: 30-01-2017

MARKET OUTLOOK FOR THE WEEK: 30-01-2017
January 29
16:52 2017

Nifty on Friday closed positively above 8600 and it is likely to gain further momentum in the days to come.  Nifty has immediate resistance at 8722 and 9000.  Nifty has strong support at 8628 and 8572.  Market participants are created fresh long positions after the January expiry on high expectation on Budget which will be unveiled on 1st February.  At present market has entered into the overbought territory and the India VIX jumped more than 5% on Friday ahead of the budget, showing volatile movements during the budget.  It is interesting to notice that the S&P 500 VIX in US moved down below 11% suggesting further uptrend in key US indices.

Beginning of the next week market will trade in a narrow range with a support at 8628 and it may face resistance at 8722.  A break below and above these said levels can take Nifty to the unchartered territories.  Banking Nifty has also outperformed the broader market on Friday.  Like nifty it is also entered in the overbought territory. Banking Nifty has supports at 19560 and 19391.  The immediate resistances for the Nifty have at 20190 and 20838.  Next week we can expect highly volatile movements on Banking Nifty too.  But it is wise to create long positions in the front line banking stocks.  Like banking sector steel sector is also expected to outperform the broader market next week.  Investors can buy good quality stock at this sector for medium term.  If we get good supports from Banking and Metal stocks then Nifty may move above 9000 during the next week.  But one should take cautious approach at higher levels on the first days of the week due to overbought situation, but can create long if there is a technical correction. IT stocks are still looking week due to technical reasons and it is prudent to reduce long positions at every rise.

Macro Economic data’s from US are due on next week are US Fed Interest Rate decision, Initial Jobless Claim, Non Farm productivity, Manufacturing Pay Roll and Non Farm Pay Roll.  GDP growth Rate, Inflation Rate, Industrial Production and Unemployment rate are expected from Euro zone next week.  Budget, Inflation Rate, WPI Inflation, WPI Fuel, GDP Growth rate, Infrastructure output, Industrial Production and Manufacturing Production are unveiled from India next week.   Market participants are expecting announcements of more tax soaps in the Budget speech next week.

Lots of front line companies are lined up to announce their quarterly earnings next week are Bajaj Fin, Dish TV, Grasim, HDFC, Kitex, V Guard, Bajaj Auto, Century Text, GHCL, HCL-Info, ICICI Bank, INTRGLB, IOC, Tata Global, Apollo Tyre, Glen mark, Marico, ACC, Jet Air and TORNTPHARM.

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ALEX MATHEWS

ALEX MATHEWS

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