Market Next


November 19
14:17 2017

In a surprise move Global rating agency Moody’s upgraded India’s Sovereign rating from Baa2 from Baa3.  This rating upgrade has happened after 14 years, which could attract more foreign investors in the equity and bond markets.  After the rating upgrade on Friday both Nifty and Sensex opened with a positive gap up, but at the end of the day both indices shed most of its gains due to weak global negative cues. Due to the upward rating revision Indian rupee opened strong and 10 year sovereign bonds yields tumbled by around 10 basis points.

Nifty closed on Friday above 10250 at 10283, is positive but upside is capped due to technical reasons and negative global cues.  Nifty has immediate resistance at 10341 and 10390.  If these two levels has taken off next week then it could test 10492, but chances are remote.   Nifty has support at 10256 and 10121.  Breakdown below these supports could bring down below 10000.

The biggest risk in US is the sharp drop in bonds, which is considered as early sign of technical correction of equity markets.  Dow Jones has strong support and resistance at 23264 and 23599 respectively, a break below or above can give a major direction for the market.  As the monthly RSI of Dow Jones is above 80 one should take utmost care while initiating long positions at higher levels.

Now let us check Nifty Bank Index, it is having support at 25368 and resistance at 26009, it is bullish but upside is capped.  Nifty PSU Bank Index is overbought so we can’t expect sharp upside, but on the other hand Nifty Private Sector Bank Index is comparatively stronger than the Public Sector Bank Index.

Due to strong rupee IT and pharma Index could fall further.  It is prudent to stay away from both sector stocks along with metal stocks.  Metal stocks corrected last week but recovered on Friday due to oversold situation, the major technical indicators are still weak, only selected stocks will outperform the market.

The result seasons has comes to an end, only major three companies bring out next week with their quarterly earnings are Siemens, Skipper and RBL.  On the macroeconomic front Bank Loan Growth YoY, Deposit Growth YoY, and Foreign Exchange Reserve data’s are due from India, from US Continuing Jobless Claims, Initial Jobless Claim, EIA Gasoline Stock change and US FOMC Minutes are due.

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