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MARKET OUTLOOK OF THE WEEK: 18-12-2017

MARKET OUTLOOK OF THE WEEK: 18-12-2017
December 21
01:48 2017

Predictions for Nifty

Nifty closed on Friday in the positive territory due to short covering on Gujarat Exit poll prediction that BJP will get majority.  If BJP get good majority on Gujarat election then we can expect Nifty moving towards 10520 and 10600 levels.  On the other hand if BJP only get less than 100 seats in Gujarat election then we cannot expect sharp up trend.  Nifty has support at 10260 and 10059, but chances of Nifty falling below 10300 is very remote, because many of the sectors like Nifty Metal, Nifty Auto, Nifty Private Sector Bank indices are showing positive outlook.  The winter session Parliament session will start from 15th December will end on 5th January.

Nifty Bank has resistances at 25421 and 24760 and the technical charts are showing positive divergence, so one can expect further uptrend to continue.  Nifty Private Sector Bank Index has a potential to move up by 100 to 200 points in the short term.  Nifty Metal Index is also looking positive because of short covering; Chinese demand may keep the metal index firm.  Selected front line IT stocks are also likely to move up, extreme short term indicators of IT Index is also positive.  US markets are likely to move up further because of declining S&P 500 VIX and recent US tax reforms.  US Dow Jones is likely to make new all time highs in the days to come. If there is a sell-off, PSU Bank Index is likely to be affect negatively, along with Pharma Index.  Nifty PSU Bank Index has resistance at 3871 and 4106.  Support for PSU Banking index is at 2637.

India trade gap narrows last week slightly as exports rebounded in November.  The government has announced relief package for India’s ailing leather and footwear industry, which are positive triggers for the market and leather and footwear sector.  India’s foreign exchange reserve, bank deposit growth and bank loan growth rate data’s are due next week.  US Fed has increased interest rate by 25 basis points and US government has reduced corporate tax are very positive for US market.  Quarterly result of Infosys will come out on 12th January.

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ALEX MATHEWS

ALEX MATHEWS

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