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MARKET OUTLOOK OF THE WEEK: 25-09-2017

MARKET OUTLOOK OF THE WEEK: 25-09-2017
September 26
02:03 2017

After the continuous uptrend we saw heavy sell-off on Friday due to weak rupee, growing geo-political tensions and weak Asian markets cues.  Downgrading of Hong Kong after China by the S&P rating agency also kept the Asian markets nervous. Domestic market VIX has risen by around 10% on Friday and closed at 12.8% indicates weakness in the market condition.  On Friday nifty lost nearly 1.56% and closed below 10,000 marks.  Going forward Nifty is likely to trade towards 9920 and 9797 levels.  Movement below these levels could trigger further sell-off and Nifty may test 9700 levels.  Nifty has resistances at 10096 and 10315. As major sectors are in the sell mode we can expect downside movements for Nifty at least in the early part of the next week.  Banking Nifty lost its key support levels and it is likely to move down towards 24142 and 23974 levels.  PSU Banking Nifty is the worst affected index in NSE.  PSU Banking Index has support at 3115, 3060 and 2198.  Price rises can be utilised to reduce long positions.  Private sector Banks are also looking weak, and in general both Private and Public sector banking stocks will witness more profit booking.  After Chinese downgrade by S&P, metal prices crashed in the Chinese commodity exchange.  NSE Metal Index has also looks weak and it may test 3474 and 3406 levels.

Pharma and IT stocks may recover from the lower levels next week, because of price correction and oversold situations.  Selected front line stocks at these two sectors can be bought at corrections for a medium to long term perspective.  As the NSE Index is on sell mode, we can expect highly volatile movements at these counters also.

Now let us check Dow Jones, which is still in buy mode may extend supports to the Asian Markets.  Dow has resistances at 22416 and 22514.  Strong support can be expected at 22285 levels.  Rising geo-political tensions can dampen the positive sentiments, so it is prudent to stay safe by reducing overnight open positions.

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ALEX MATHEWS

ALEX MATHEWS

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