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MARKET OUTLOOK FOR THE WEEK: 03-07-2017

MARKET OUTLOOK FOR THE WEEK: 03-07-2017
July 02
16:27 2017

Last week market remained under pressure due to profit booking and June expiry.   At one point Nifty moved down below 9500 but on Friday closed above 9500.  Nifty has entered in the oversold territory but yet to get a strong buying signal.  Weekly charts are in the sell mode but the monthly charts a still indicating strong market outlook.  Short term corrections can continue but outlook is positive on the medium term that is what the indicators suggest.  Nifty has support at 9450 and 9400 below it can move down towards 9301 but chances are too remote.  Nifty has resistance at 9650.  American markets will be shut shop on Monday and Tuesday on account of Independence Day.  Monday will be the first day of trading after the GST roll out, and there are chances that market could open with an upside gap.  A long strangle is advisable on Nifty.  S&P 500 VIX is above 11 and domestic India VIX is also very close to it.  These indicators are suggesting less volatile movements for the markets.  Last week Bank Nifty hit very badly and it has support at 22773 and 22431.  Major technical indicators are suggesting further weakness on cards.  Mid cap PSU banking stocks are looking weak.  Banking Nifty has resistance at 23653 and 23848.  On Monday if Banking stocks open with an upside gap then one can initiate short positions, because major technical indicators are suggesting further weakness to continue.

Like Banking Nifty IT stocks are also looks weak, IT index has resistances at 10350 and has support at 10036 and 9900.  As the short term indicator is in the oversold region can help the IT stocks to open firm on Monday but major trends are still weak.

Nifty FMCG sector is like to move up sharply after the GST roll out.  FMCG index has resistance at 26505 and 26846.  Support for FMCG index is at 25798.  Both the daily and weekly charts are giving strong support to FMCG sector index.  Sectors like Metal and Pharma index are already entered into oversold region.  Therefore we can expect recovery in these two sector.

Last week Chinese manufacturing PMI came out, it rose to 51.7 from 51.2 and their manufacturing activity improved much better than earlier expected.  There are news that European Central Bank, Bank of England and Bank of Canada signalled that measures to tighten monetary policy could be adopted very soon.

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ALEX MATHEWS

ALEX MATHEWS

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