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MARKET OUTLOOK FOR THE WEEK: 17-04-2017

MARKET OUTLOOK FOR THE WEEK: 17-04-2017
April 17
16:59 2017

Nifty and Bank Nifty made new highs, but profit booking trimmed early gains and the both indices and closed lower on Thursday.  Investors took cautious stand because of long weekend and heightened geo-political tensions.  Markets were closed on Friday due to Good Friday, many indices futures were also on decline because of prevailing uncertainties over geo-political risks.  Going forward the markets may correct due to the rising S&P 500 VIX and India VIX , which are said to be early indications of uncertain market conditions.  Nifty has minor support at 9027, on Monday markets may open well below this and may recover in the second half.  If Nifty fails to recover then we can expect support from 8995.  Two consecutive days closing below 8995 can cause further profit booking.  Nifty has resistances at 9258 and 9270, above these two levels further uptrend can be expected, but chances are remote.  Investors can buy Nifty put options if there is a weakness in market trends.  It is advisable not to create short positions on Nifty put options.

In the domestic market defensive sector stocks are likely to help the market in a great way.  Nifty FMCG index is likely to move up to 23840.  Pharma sector stocks are also can support the markets, Nifty Pharma index is all set to test 10776 and 10906.  Nifty Banking Index is still in buy mode and many of the frontline banking stocks is expected to come out with its quarterly earnings this week.  It is prudent to take cautious stand, rather than buying in large quantities ahead of the results.

Nifty Metal Index was weak and it will remain subdued for some more time.  Nifty metal index is having support at 2958.  Majority of the front line stocks are looking weak.  Nifty IT stocks are in the oversold region but yet to give a buy signal due to weak quarterly earnings and strong domestic currency.  IT index is likely to get support only at 9743.

Last week India’s front line inflation moved towards 3.8% from 3.6% and Industrial production contracted towards -1.2% from 3.3%.  During the week WPI  Food, WPI Fuel, WPI Manufacturing data’s are expected along with Nikkei Manufacturing PMI.

United States Industrial Production MOM and YOY; US EIA Crude oil stock change and US continuing jobless claim data’s are expected next week.  From the Euro Zone Balance of Trade, Inflation rate, Consumer confidence and Markit Service PMI are due.

India’s front line companies started coming out with their quarterly earnings, companies like TCS, Indusind Bank and Yes bank are the few on the list.  Investors are advised to take good quality stocks for long term perspective if there is a price correction.

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ALEX MATHEWS

ALEX MATHEWS

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