Weekly Outlook (May 02, 2016 – May 06, 2016):
Nifty weekly performance (April 25, 2016 – April 29, 2016):
Indian stock markets ended the week on a negative note. For the week, the BSE Sensex was down by 0.9% and the NSE Nifty was down by 0.6%.
These losses follow the sharp surge of the past few weeks. The Sensex as well as the Nifty have notched gains of 13% and 14% respectively since Feb 29. The mid and small-cap indices that and are up 16% and 17% respectively. Market participants are now gauging the strength of this rally and whether it will continue.
The index opened the week on a slightly bearish note, moved up in the middle and slipped back again in the end. It ended the week with a loss of 0.63%. During the week the level of 8,000 again acted as a resistance. On the lower side, it found support around 7,800. This range seems to be holding up the index for the time being. We will have to wait and watch which way the index turns...
Nifty Prediction for Week (May 02, 2016 – May 06, 2016):
Support for the index lies in the zone of 7850 where 200 Daily SMA is lying. Minor support for the index lies in the zone of 7730 to 7780 where the index has opened gap up on 13/04/2016. If the index manages to close below these levels then the index can drift to the levels of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying.
Strong resistance zone for the index lies in the range of 7950 to 8000 where 500 Daily SMA is lying. If the index manages to close above these levels then the index can move to the levels of 8050 where trend-line joining earlier highs is lying.
Broad range for the week is seen from 7600 on downside to 8100 on upside.
Weekly News and Highlights:
1) The US Federal Reserve decided not to raise its benchmark rates in its two-day policy meet that ended Wednesday.
Fed Chair Janet Yellen said that economic activity appears to have slowed despite job market gains. She noted that household spending has moderated in the US. The US central bank's policy-setting committee said the labour market had improved further.
The Fed's stance aided the rally in crude oil prices. The commodity surged to its 2016 peaks this week. The momentum has provided relief to the ongoing volatility in crude oil prices. And the effect of this would be seen in oil companies too.
2) Another major event following the Fed’s meeting was the Bank of Japan’s (BOJ) monetary policy. The BOJ surprised markets by keeping its monetary policy steady on Thursday. The central bank continued with its negative interest rate policy (NIRP) and kept its deposit rate at -0.1%. Further, it maintained its base monetary target at 80 trillion yen.
However, the central bank did leave the door open to additional easing and said it will provide loans at zero interest rates to areas impacted by the recent Kyushu earthquakes. Following this decision, BOJ Governor Haruhiko Kuroda stated that the BOJ remained committed to achieving its 2% inflation target in about two years.
The yen surged and equities plunged after the above announcements.
INDIA
3) Realty stocks were in the limelight on Thursday after a media report stated that the Brihan Mumbai Municipal Corporation (BMC) has recommended an increase in the permissible floor space index (FSI) in Greater Mumbai. It was noted that the BMC recommended an increase in permissible FSI from the present level of 1.33 to 2 and in some cases even up to 5. FSI is the ratio between allowable construction space to the actual space. The current FSI stands at 1.33 in the island city and 1 in the suburbs of Mumbai.
4) As per The Economic Times, India's IT industry is expected to post the seventh straight year of improved productivity. This is seen as automation adds to efficiency and drives down hiring rates among software services companies.
While the above data comes as a welcome breather for the IT industry that has been trying to protect profit margins, it raises concerns for engineering jobs in a sector that employs over three million people. And this trend is already in place. India's large IT firms are no longer hiring employees the way they were five years ago.
All eyes are now on June's meeting of OPEC countries, where oil producers may be forced to put a cap on production if crude prices begin another downward spiral.
COMMODITIES :
Gold traded on a positive note during the week. On Monday, it opened higher than its previous week's closing. Gains were seen on the back of a weaker dollar. And positive cues from the global markets coupled with a sell-off in equities aided this rally. The uptrend extended to midweek as weak US economic data led investors to increase their bets in safe haven assets. Most of the gains were seen after the outcome of the Federal Reserve policy meet. On Friday, gold jumped to a seven-week high. This was seen as the dollar remained weak after the BOJ stood pat on policy. The MCX Gold June contract opened the session at 29,092.00/10 grams. It traded at a high of 30,375.00/10 grams before finally closing the session at 30,266.00/10 grams.
Indian stock markets ended the week on a negative note. For the week, the BSE Sensex was down by 0.9% and the NSE Nifty was down by 0.6%.
These losses follow the sharp surge of the past few weeks. The Sensex as well as the Nifty have notched gains of 13% and 14% respectively since Feb 29. The mid and small-cap indices that and are up 16% and 17% respectively. Market participants are now gauging the strength of this rally and whether it will continue.
The index opened the week on a slightly bearish note, moved up in the middle and slipped back again in the end. It ended the week with a loss of 0.63%. During the week the level of 8,000 again acted as a resistance. On the lower side, it found support around 7,800. This range seems to be holding up the index for the time being. We will have to wait and watch which way the index turns...
Nifty Prediction for Week (May 02, 2016 – May 06, 2016):
Support for the index lies in the zone of 7850 where 200 Daily SMA is lying. Minor support for the index lies in the zone of 7730 to 7780 where the index has opened gap up on 13/04/2016. If the index manages to close below these levels then the index can drift to the levels of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying.
Strong resistance zone for the index lies in the range of 7950 to 8000 where 500 Daily SMA is lying. If the index manages to close above these levels then the index can move to the levels of 8050 where trend-line joining earlier highs is lying.
Broad range for the week is seen from 7600 on downside to 8100 on upside.
Weekly News and Highlights:
1) The US Federal Reserve decided not to raise its benchmark rates in its two-day policy meet that ended Wednesday.
Fed Chair Janet Yellen said that economic activity appears to have slowed despite job market gains. She noted that household spending has moderated in the US. The US central bank's policy-setting committee said the labour market had improved further.
The Fed's stance aided the rally in crude oil prices. The commodity surged to its 2016 peaks this week. The momentum has provided relief to the ongoing volatility in crude oil prices. And the effect of this would be seen in oil companies too.
2) Another major event following the Fed’s meeting was the Bank of Japan’s (BOJ) monetary policy. The BOJ surprised markets by keeping its monetary policy steady on Thursday. The central bank continued with its negative interest rate policy (NIRP) and kept its deposit rate at -0.1%. Further, it maintained its base monetary target at 80 trillion yen.
However, the central bank did leave the door open to additional easing and said it will provide loans at zero interest rates to areas impacted by the recent Kyushu earthquakes. Following this decision, BOJ Governor Haruhiko Kuroda stated that the BOJ remained committed to achieving its 2% inflation target in about two years.
The yen surged and equities plunged after the above announcements.
INDIA
3) Realty stocks were in the limelight on Thursday after a media report stated that the Brihan Mumbai Municipal Corporation (BMC) has recommended an increase in the permissible floor space index (FSI) in Greater Mumbai. It was noted that the BMC recommended an increase in permissible FSI from the present level of 1.33 to 2 and in some cases even up to 5. FSI is the ratio between allowable construction space to the actual space. The current FSI stands at 1.33 in the island city and 1 in the suburbs of Mumbai.
4) As per The Economic Times, India's IT industry is expected to post the seventh straight year of improved productivity. This is seen as automation adds to efficiency and drives down hiring rates among software services companies.
While the above data comes as a welcome breather for the IT industry that has been trying to protect profit margins, it raises concerns for engineering jobs in a sector that employs over three million people. And this trend is already in place. India's large IT firms are no longer hiring employees the way they were five years ago.
All eyes are now on June's meeting of OPEC countries, where oil producers may be forced to put a cap on production if crude prices begin another downward spiral.
COMMODITIES :
Gold traded on a positive note during the week. On Monday, it opened higher than its previous week's closing. Gains were seen on the back of a weaker dollar. And positive cues from the global markets coupled with a sell-off in equities aided this rally. The uptrend extended to midweek as weak US economic data led investors to increase their bets in safe haven assets. Most of the gains were seen after the outcome of the Federal Reserve policy meet. On Friday, gold jumped to a seven-week high. This was seen as the dollar remained weak after the BOJ stood pat on policy. The MCX Gold June contract opened the session at 29,092.00/10 grams. It traded at a high of 30,375.00/10 grams before finally closing the session at 30,266.00/10 grams.
Update on Techno Funda Stocks Recommendations -6th April 2016
Revised Target and Stop Loss
Target : 1,045.00 , Stop Loss : 934.80
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