Weekly Outlook Nifty for week (May 09, 2016 – May 13, 2016):
Nifty weekly performance (May 02, 2016 – May 06, 2016):
Indian stock markets ended the week on a negative note. For the week, the BSE Sensex was down by 1.47% and the NSE Nifty was down by 1.48%.
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 finally breached the 7,800 levels during the week. But it hasn't seen a free fall. It has traded choppily in a range. It seems like it will trade on a lackluster note in the coming week. The volumes have dried up and momentum is also in the neutral territory. After long time FII's were increasing short positions in futures and options . Thus we will have to wait and watch out for some more price action before a clear view emerges.
Nifty Prediction for Week Nifty for week (May 09, 2016 – May 13, 2016):
Support for the index lies in the zone of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying. If the index manages to close below these levels then the index can drift to the levels of 7250 to 7300 where the index has opened gap up on 02/03/2016.
Resistance for the index lies in the zone of 7800 where 200 Daily SMA is lying. If the index manages to close above these levels then the index can move to the levels of 7950 to 8000 where 500 Daily SMA is lying.
Broad range for the week is seen from 7500 on downside to 8000 on upside.
Bank Nifty Prediction for Week Nifty for week (May 09, 2016 – May 13, 2016):
Support for the index lies in the zone of 15800 to 16000 where 100 Daily SMA are lying. If the index manages to close below these levels then the index can drift to the levels of 15400 to 15500 from where the index has bounced in the month of April – 2016.
Strong resistance zone for the index lies in the range of 16800 to 17000 where 200 & 500 Daily SMA and trend-line joining earlier highs is lying. If the index manages to close above these levels then the index can move to the levels of 17100 from where the index sold off in the month of Jan – 2016.
Range for the week is seen from 15700 to 15900 on downside to 16800 to 17000 on upside.
Weekly News and Highlights:
1) Activity at China's factories shrank for the 14th straight month in April. This was seen as demand stagnated that forced companies to shed jobs at faster pace.
The Markit Manufacturing Purchasing Managers' index (PMI) fell to 49.4 last month. This was below market expectations of 49.9 and as against 49.7 recorded in the month of March.
It was noted that new export orders shrank for the fifth straight month, nearly at the same rate as witnessed in March. Also, total new orders from home and abroad were unchanged. This led factory owners to cut output and shed jobs at a faster rate.
Output declined into the negative territory with a reading of 49.9. This was as against March’s reading of 50.4. Further, employment levels fell for the 30th month in a row. As per a leading financial daily, Chinese firms that reported reduced staff numbers cited company down-sizing policies and the non-replacement of workers who left voluntarily.
Data further showed that the official Purchasing Managers' Index (PMI) stood at 50.1 in April, easing from March's 50.2. Also, one shall note that China’s economy grew at an annual rate of 6.7% in the first quarter of 2016, its slowest pace since 2009.
2) US economy, data showed the US services sector expanded in April as new orders and employment accelerated. However, this optimism was offset by another data showing private US employers hired the fewest number of workers in three years in April.
Further, the much awaited US jobs report was released on Friday. The report stated that the US economy added the fewest number of jobs in seven months in April. The Labor Department said on Friday that nonfarm payrolls increased by 1,60,000 jobs last month. This was seen as construction employment rose marginally and the retail sector shed jobs for the first time since December 2014.
There was also a slowdown in hiring. This was seen on the back of weak economic growth, subdued productivity and corporate profits. The unemployment rate was steady at 5% for the second month in a row. Economists were anticipating 2,05,000 jobs would be added in April and for the unemployment rate to decline to 4.9%.
3) Australia’s central bank cut its benchmark interest rate to a record low. The Reserve Bank of Australia lowered the cash rate by 25 basis points (bps) to 1.75%. Further, the central bank left the door open for further easing.
COMMODITIES
Gold traded on a mixed note during the week. On Monday, it opened its session higher than last week's closing. This was seen as market participants widened their positions in the yellow-metal after tracking a firm trend overseas. However, gold failed to hold onto these gains. Prices fell midweek as the dollar firmed. Also, the talks by Federal Reserve officials on US interest rate hikes this year weighed on gold prices. The downtrend was also seen during the end of the week. On Thursday, gold was set to post its biggest weekly decline in six weeks. This was seen as the dollar firmed ahead of the US non-farm payrolls report. However, gold registered some gains on Friday and ended its session in the green.
Indian stock markets ended the week on a negative note. For the week, the BSE Sensex was down by 1.47% and the NSE Nifty was down by 1.48%.
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 finally breached the 7,800 levels during the week. But it hasn't seen a free fall. It has traded choppily in a range. It seems like it will trade on a lackluster note in the coming week. The volumes have dried up and momentum is also in the neutral territory. After long time FII's were increasing short positions in futures and options . Thus we will have to wait and watch out for some more price action before a clear view emerges.
Nifty Prediction for Week Nifty for week (May 09, 2016 – May 13, 2016):
Support for the index lies in the zone of 7500 to 7550 from where the index has broken down after making the double bottom pattern and 100 Daily SMA is lying. If the index manages to close below these levels then the index can drift to the levels of 7250 to 7300 where the index has opened gap up on 02/03/2016.
Resistance for the index lies in the zone of 7800 where 200 Daily SMA is lying. If the index manages to close above these levels then the index can move to the levels of 7950 to 8000 where 500 Daily SMA is lying.
Broad range for the week is seen from 7500 on downside to 8000 on upside.
Bank Nifty Prediction for Week Nifty for week (May 09, 2016 – May 13, 2016):
Support for the index lies in the zone of 15800 to 16000 where 100 Daily SMA are lying. If the index manages to close below these levels then the index can drift to the levels of 15400 to 15500 from where the index has bounced in the month of April – 2016.
Strong resistance zone for the index lies in the range of 16800 to 17000 where 200 & 500 Daily SMA and trend-line joining earlier highs is lying. If the index manages to close above these levels then the index can move to the levels of 17100 from where the index sold off in the month of Jan – 2016.
Range for the week is seen from 15700 to 15900 on downside to 16800 to 17000 on upside.
Weekly News and Highlights:
1) Activity at China's factories shrank for the 14th straight month in April. This was seen as demand stagnated that forced companies to shed jobs at faster pace.
The Markit Manufacturing Purchasing Managers' index (PMI) fell to 49.4 last month. This was below market expectations of 49.9 and as against 49.7 recorded in the month of March.
It was noted that new export orders shrank for the fifth straight month, nearly at the same rate as witnessed in March. Also, total new orders from home and abroad were unchanged. This led factory owners to cut output and shed jobs at a faster rate.
Output declined into the negative territory with a reading of 49.9. This was as against March’s reading of 50.4. Further, employment levels fell for the 30th month in a row. As per a leading financial daily, Chinese firms that reported reduced staff numbers cited company down-sizing policies and the non-replacement of workers who left voluntarily.
Data further showed that the official Purchasing Managers' Index (PMI) stood at 50.1 in April, easing from March's 50.2. Also, one shall note that China’s economy grew at an annual rate of 6.7% in the first quarter of 2016, its slowest pace since 2009.
2) US economy, data showed the US services sector expanded in April as new orders and employment accelerated. However, this optimism was offset by another data showing private US employers hired the fewest number of workers in three years in April.
Further, the much awaited US jobs report was released on Friday. The report stated that the US economy added the fewest number of jobs in seven months in April. The Labor Department said on Friday that nonfarm payrolls increased by 1,60,000 jobs last month. This was seen as construction employment rose marginally and the retail sector shed jobs for the first time since December 2014.
There was also a slowdown in hiring. This was seen on the back of weak economic growth, subdued productivity and corporate profits. The unemployment rate was steady at 5% for the second month in a row. Economists were anticipating 2,05,000 jobs would be added in April and for the unemployment rate to decline to 4.9%.
3) Australia’s central bank cut its benchmark interest rate to a record low. The Reserve Bank of Australia lowered the cash rate by 25 basis points (bps) to 1.75%. Further, the central bank left the door open for further easing.
COMMODITIES
Gold traded on a mixed note during the week. On Monday, it opened its session higher than last week's closing. This was seen as market participants widened their positions in the yellow-metal after tracking a firm trend overseas. However, gold failed to hold onto these gains. Prices fell midweek as the dollar firmed. Also, the talks by Federal Reserve officials on US interest rate hikes this year weighed on gold prices. The downtrend was also seen during the end of the week. On Thursday, gold was set to post its biggest weekly decline in six weeks. This was seen as the dollar firmed ahead of the US non-farm payrolls report. However, gold registered some gains on Friday and ended its session in the green.
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