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MARKET OUTLOOK OF THE WEEK: 27-03-2017

MARKET OUTLOOK OF THE WEEK: 27-03-2017
March 26
16:23 2017

Nifty witnessed marginal recovery on Thursday and Friday and finally it closed at 9108. Tuesday being a holiday (Gudi Padwa) investors may stay sidelines without committing big trades on Monday. Investors are focussing on Thursdays’ futures and options expiry. If we examine the Nifty options data’s we can see good amount of buying call options at 9100 and 9200 on Nifty. It is assumed that the investors are expecting a level of 9200 before the expiry. Last week current account deficit came out which was slightly higher than the street expectation. The current account deficit stood at $7.9 billion versus $7.1 billion. But the market not reacted to the news, because market participants are constantly looking only the long term growth of our economy. In the Nifty put option segment value buying can been seen in March 8900 and 8800 options. As Nifty has very strong support at 8983 levels and it is prudent not to create fresh long put below 8900 strike price. India VIX is also suggesting the same trading idea, because it settled at 11.9 on Friday. Investors with long term view can buy 9200 call options of April and 8900 put options in the April series, a sharp break out either side can benefit the investor.

Buying activities by FII and DII are supported the market, and in the days to come also we can expect similar trends. Banking Nifty had a tremendous come back on Friday with strong vigour. Banking stocks especially the public sector banking stocks can move up further after the finance minister’s assurance that the government would bring various solutions to improve the asset quality of the banks. Banking Nifty has support at 20748 and having resistance at 21303. As the March expiry comes closer we can expect sharp short covering in banking Nifty especially above 22000.

Nifty IT index is still looking weak but yet to give major selling indications yet. IT index has support at 10716 and 10704. Resistance for the IT are 10842 and 10908. Higher level profit booking can be expected in selective stocks.
Nifty metal index is weak, but some selective stocks are still looks better, and it has support at 3082 and resistances at 3212 and 3287. Like Metal index FMCG Index is also looks sideways with major support at 22924 and resistance at 23747. Pharma and Auto stocks are likely to remain in a narrow range for the time being.

US pending home sales month on month and year on year, continuous jobless claims, initial jobless claim and GDP growth rate are expected next week. Consumer confidence, balance of trade, retail sales, inflation rate, industrial production and unemployment rates are due from EURO zone.

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ALEX MATHEWS

ALEX MATHEWS

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