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INDIAN STOCK MARKET OUTLOOK OF THE WEEK: 16-10-2017

INDIAN STOCK MARKET OUTLOOK OF THE WEEK: 16-10-2017
October 16
04:52 2017

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Nifty on Friday made a high at 10190 and finally closed at 10167.  The Immediate resistances are at 10246 and 10300 and support for Nifty is at 9977.  If Nifty moves down then it could test 9866 and 9500.  As the uptrend is limited it is advisable to reduce long positions.  Market may show sideways movements on Monday because of strong put-call ratio and low India VIX which is at 11.26.  Dow Jones S&P 500 VIX is ruling at multi year lows showing confidence among investors.

While checking the RSI (Relative Strength Index, which tracks over bought and oversold situations.  If RSI indicator is above 70 it is said to be overbought and below 30 it is indicates oversold situation); Nifty 14 month RSI is at 70.10 and Dow Jones RSI is at 82.70 which is highly over bought in nature. The monthly RSI of NASDAQ is at 79.05, the daily RSI of Nikkei, DAX, KOPSI and Shanghai indices are also in the overbought state.  Negatives news, geo-political tensions etc can cause heavy sell-off among the global markets due to this technical reason.

India’s export grow 26% in September fastest in 6 months, Industrial production and manufacturing production data’s are also shows marginal jump.  Last week quarterly earnings season started, TCS and Reliance came out with moderately good set of numbers.   Federal Bank, DCB Bank, Delta Corp, JM Financial, AXIS Bank, Bajaj Auto, CRISIL, WIPRO and Ultra Tech Cem etc. will come out next week with its earnings.

If there is a technical down ward correction on markets then sectors like Nifty Metal, Nifty Energy, Nifty Bank and Nifty Private Sector Bank indices will fall heavily.  Nifty IT and Nifty Pharma Indices are slightly positive, long term investors can buy small quantities of good quality stocks at a phased manner.

US Inflation rate rises to 5 month high which is negative for US dollar.  Next week US Federal Reserve Yellen Speech is very crucial for equity markets across the globe.  WPI Inflation, WPI Fuel, WPI Manufacturing YOY data’s are expected next week.

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ALEX MATHEWS

ALEX MATHEWS

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