Weekly Outlook Nifty for week (May 23, 2016 – May 27, 2016)
Nifty weekly performance (May 16, 2016 – May 20, 2016):
Indian stock markets ended the week on a negative note. The BSE Sensex was down by 0.74%, while the NSE Nifty was down by 0.74%.
The index ended the week with a loss of 0.83% at 7,750. The index slipped outside the 100-point range of 7,800 to 7,900 in the latter half of the week. It had traded in this range over the last 10 days and seems like bears are gain an edge.
Nifty Prediction for Week (May 23, 2016 – May 27, 2016):
Minor support for the index lies in the zone of 7700 to 7750. 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.
The index has closed around the resistance zone of 7820 where 200 Daily SMA is lying. Resistance for the index lies in the zone 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 8200.
Broad range for the week is seen from 7500 on downside to 8000 on upside.
Bank Nifty Prediction for Week (May 23, 2016 – May 27, 2016):
Minor support for the index lies in the zone of 16200. 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 16600 to 16800 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 16000 to 16200 on downside to 16800 to 17000 on upside.
Weekly News and Highlights:
1) Minutes released during the week from a Federal Reserve meeting in April hinted that US interest rate hike is still in play. The Fed spelled out the possibility of an interest rate hike in its June policy meeting if data points to an improving economy.
A recent batch of strong economic data, therefore, supports a June hike. It was noted that the number of Americans filing for unemployment aid fell from a 14-month high last week. Other reports revealed upbeat retail sales, home building, and industrial production data. Further, the consumer price index rose 0.4% in April, reflecting higher energy costs. It appears the US economy was picking up speed in the second quarter.
2)During the week, crude oil rose to fresh 2016 highs. This was seen on the back of a slowdown in US drilling and an increase in Chinese crude refinery processing. One shall also note that the US Energy Information Administration (EIA) during last week stated that demand for oil worldwide is set to grow by 270,000 barrels per day (bpd) in 2016. These developments led to a surge in oil prices during the week.
3)Moving on to the news from China. China's investment, factory output, and retail sales all grew more slowly than expected in April. Industrial output rose 6% YoY in April, compared with 6.8% growth in March. Further, retail sales grew by a less-than-expected 10.1% in April. The data fuelled concerns about the health of the world’s second-largest economy. Tracking these concerns President Xi Jinping said that China must push forward reform of state-owned enterprises, accelerate changes in how government functions, and deepen the fundamental reforms of pricing, taxation, finance, and social insurance.
4) Data showed Japan’s economy expanded at the fastest pace in a year during the first quarter. The country’s economy expanded by an annualised 1.7% in January-March. This was as against a 1.7% contraction witnessed in the previous quarter. The data supported Prime Minister Shinzo Abe's policies to spur inflation and growth in the world's third-largest economy.
India:
5) During the week, it was reported that State Bank of India (SBI) is going to merge its five associate banks, along with Bharatiya Mahila Bank, with itself. The bank recently announced that its board has given in-principle approval for the bank to discuss the possibility of acquiring its associate banks.
The above development comes as some state-run banks have evinced their interest to take on smaller entities. Finance Minister Arun Jaitley had said in March that the bankers' themselves have supported the proposal of consolidation of banks to have stronger banks rather than more.
COMMODITIES :
Gold traded on a mixed note during the week. It opened its session in the green on Monday. Prices rose as slowing economic growth in China lifted the safe-haven appeal of precious metals. Also, a weak trend in Asian markets supported the upward rally. Gains were also seen on Tuesday on the back of a weak dollar overseas. However, the yellow metal traded on a flattish note midweek because gains were capped as Asian shares recovered from their lows. Going further, gold registered losses during the end of the week. Prices fell after strong US economic data coupled with comments from the Fed officials reinforced expectations that the central bank could soon hike US interest rates. On Friday, gold was on track for its biggest weekly drop in eight weeks on the back of above cues and a firm dollar. The MCX Gold June contract opened the session at 30,064/10 grams. It traded at a low of 29,623/10 grams before finally closing the session at 29,691/10 grams
Indian stock markets ended the week on a negative note. The BSE Sensex was down by 0.74%, while the NSE Nifty was down by 0.74%.
The index ended the week with a loss of 0.83% at 7,750. The index slipped outside the 100-point range of 7,800 to 7,900 in the latter half of the week. It had traded in this range over the last 10 days and seems like bears are gain an edge.
Nifty Prediction for Week (May 23, 2016 – May 27, 2016):
Minor support for the index lies in the zone of 7700 to 7750. 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.
The index has closed around the resistance zone of 7820 where 200 Daily SMA is lying. Resistance for the index lies in the zone 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 8200.
Broad range for the week is seen from 7500 on downside to 8000 on upside.
Bank Nifty Prediction for Week (May 23, 2016 – May 27, 2016):
Minor support for the index lies in the zone of 16200. 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 16600 to 16800 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 16000 to 16200 on downside to 16800 to 17000 on upside.
Weekly News and Highlights:
1) Minutes released during the week from a Federal Reserve meeting in April hinted that US interest rate hike is still in play. The Fed spelled out the possibility of an interest rate hike in its June policy meeting if data points to an improving economy.
A recent batch of strong economic data, therefore, supports a June hike. It was noted that the number of Americans filing for unemployment aid fell from a 14-month high last week. Other reports revealed upbeat retail sales, home building, and industrial production data. Further, the consumer price index rose 0.4% in April, reflecting higher energy costs. It appears the US economy was picking up speed in the second quarter.
2)During the week, crude oil rose to fresh 2016 highs. This was seen on the back of a slowdown in US drilling and an increase in Chinese crude refinery processing. One shall also note that the US Energy Information Administration (EIA) during last week stated that demand for oil worldwide is set to grow by 270,000 barrels per day (bpd) in 2016. These developments led to a surge in oil prices during the week.
3)Moving on to the news from China. China's investment, factory output, and retail sales all grew more slowly than expected in April. Industrial output rose 6% YoY in April, compared with 6.8% growth in March. Further, retail sales grew by a less-than-expected 10.1% in April. The data fuelled concerns about the health of the world’s second-largest economy. Tracking these concerns President Xi Jinping said that China must push forward reform of state-owned enterprises, accelerate changes in how government functions, and deepen the fundamental reforms of pricing, taxation, finance, and social insurance.
4) Data showed Japan’s economy expanded at the fastest pace in a year during the first quarter. The country’s economy expanded by an annualised 1.7% in January-March. This was as against a 1.7% contraction witnessed in the previous quarter. The data supported Prime Minister Shinzo Abe's policies to spur inflation and growth in the world's third-largest economy.
India:
5) During the week, it was reported that State Bank of India (SBI) is going to merge its five associate banks, along with Bharatiya Mahila Bank, with itself. The bank recently announced that its board has given in-principle approval for the bank to discuss the possibility of acquiring its associate banks.
The above development comes as some state-run banks have evinced their interest to take on smaller entities. Finance Minister Arun Jaitley had said in March that the bankers' themselves have supported the proposal of consolidation of banks to have stronger banks rather than more.
COMMODITIES :
Gold traded on a mixed note during the week. It opened its session in the green on Monday. Prices rose as slowing economic growth in China lifted the safe-haven appeal of precious metals. Also, a weak trend in Asian markets supported the upward rally. Gains were also seen on Tuesday on the back of a weak dollar overseas. However, the yellow metal traded on a flattish note midweek because gains were capped as Asian shares recovered from their lows. Going further, gold registered losses during the end of the week. Prices fell after strong US economic data coupled with comments from the Fed officials reinforced expectations that the central bank could soon hike US interest rates. On Friday, gold was on track for its biggest weekly drop in eight weeks on the back of above cues and a firm dollar. The MCX Gold June contract opened the session at 30,064/10 grams. It traded at a low of 29,623/10 grams before finally closing the session at 29,691/10 grams
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