Stock Bank Nifty Outlook 06 November 2013

8170080-stock-market-abstract-backgroundSensex (20975) / Nifty (6253)

The opening session of the week began with half a percent downside gap on the back weak Asian bourses. Right from the opening tick, our benchmark index experienced enormous selling pressure in some of the index heavyweights. As a result, despite marginal recovery in the midsession, the index eventually closed almost at the lowest point of the day. On the sectoral front, the FMCG, Consumer Durables and IT conglomerates ended in the red; whereas the Realty and PSU counters outperformed our benchmark index. The advance to decline ratio was in favor of the advancing counters.

Formation

  • The ’89-day EMA’ and the ’89-week EMA’ are placed at 19860 / 5906 and 18915 / 5687 levels, respectively.
  •   The ’20-day EMA’ and the ‘20-week EMA’ are placed at 20683 / 6143 and 19900 / 5924 levels, respectively.
  • The monthly momentum oscillators are now positively poised.
  • On the monthly chart, we are observing a breakout from the ‘Multiple Resistance Zone’.

 

Trading strategy:

A four day winning streak has finally come to end as the index trimmed by a percent during yesterday’s session. Going forward, previous highs of 6305 – 6358 levels are seen as major resistances for the index. In our previous report, we had mentioned that the Nifty is currently trading at the Multiple Resistance Zone and in the past, the market had a tendency of reversing from these levels. On the downside, 6222 level would act as a crucial support for the index. A sustainable move and close below this level would open up the possibilities of a further downside towards 6070 levels. However, looking at the higher degree charts if the index manages to take a support around 6222 level, then possibility of a new all-time high cannot be ruled out. At present, we advise traders to adopt a stock specific approach and keep revising stop losses in order to safeguard their profits.

Bank Nifty Outlook – (11499)

Amidst significant volatility, yesterday the Bank Nifty shed nearly a percent by the end of the session. The recovery from the lows in the first half got sold into as the banking heavyweight, ICICI Bank corrected significantly in yesterday’s session. Considering current chart structure, we are of the view that 11691 – 11736 levels would act as major hurdles for the bulls in coming trading session. If Bank Nifty manages to sustain above these levels then we may see extended rally towards 11992. On the flipside, 11462 – 11443 may provide decent support for the Index. Any fall below 11443 would open up possibilities of near term correction towards 11219 – 11170 levels.

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Stock Bank Nifty Outlook 06 November 2013

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