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MARKET OUTLOOK FOR THE WEEK: 24-07-2017

MARKET OUTLOOK FOR THE WEEK: 24-07-2017
July 24
02:35 2017

Last week markets remained sideways to positive and it is likely to move up towards 10000 in the days to come.  The immediate resistances for the Nifty are 9952 and 10021.  We can expect a strong support emerging from the level of 9839 and 9787.  MSCI All Country World Index made a new 52 week high last week after Bank of Japans announcement of continuation stimulus programme markets corrected slightly on Friday.  But the outlook still remains firm.   On Friday European Central Bank announced massive purchase of government bonds to the tune of 60 billion euro per month through December.  The ECB decided to continue with the same interest rates disappointed the market participants.    As the markets are at all time highs and very close to its major resistance levels one should trade cautiously.  Buying call options out of the money can be considered.  Both India VIX and S&P 500 VIX suggest strong upward momentum in the offering. During the week Reliance Industries announced one for one bonus and Wipro announced the buy back.  Both these news has give further strength to the market.

Banking Nifty is trading at a premium and selective buying can further boost the upside potential.  The recent quarterly earnings of the PSU banks suggest improvement in profitability, but concerns of the NPA still worries the market participants.  Next week PSU banking stocks will remains sideways but the private sector banks stocks will out perform the banking Nifty.  Banking Nifty has immediate resistance t 24350 if that level has been taken off then we can expect a level of 24700.  Support for the banking nifty lies at 24032.  Now let us check the PSU banking Index, which is having support at 3456 and resistance at 3603.

Nifty pharma is on sideways mode and it can give a buy indication most probably on Tuesday or Wednesday.  Pharma Index has support at 10052 and having resistance at 10383.  Investors can buy selective front line pharma stocks for medium term perspective.

Nifty IT index is slightly overbought, but the major outlook still remains positive.  IT index has immediate resistance at 10981 and support at 10747.   Among various sectorial indices Nifty Metal and Nifty energy indices looks very positive.  Investors can buy prominent stocks in these sectors.  FMCG sector stocks will remain weak, due to overbought situation.  Nifty FMCG index has support at 25644 and resistance at 26019.

Geo-political tensions and political uncertainty in Washington can put shadow over the world markets.  US President Donald Trump’s private business is set to come under investigation over the allegations that Russia influenced the 2016 US Presidential election.

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ALEX MATHEWS

ALEX MATHEWS

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