WEEKLY~~~!!!

Indian Markets have rebounded from lower levels on account of a short-covering rally & buying support at lower levels due to better than expected Domestic Macro-Economic data, stable global markets & on anticipation of Banking Reforms on the back of scheduled meeting of PSU Banks with PM & FM. Also passage of few important reform ordinances has led to an expectation of the Government starting to gather further pace in its reforms related activity ahead of the Union budget 2015.

Core sector growth climbed to a five month high of 6.7% in November, suggesting that industrial production may take a turn for the better after an unexpected contraction in October. Growth was 3.2 percent in November last year.

Indian manufacturing activity expanded at its fastest pace in two years in December 2014. The HSBC Manufacturing Purchasing

Managers’ Index (PMI), compiled by Markit, rose to 54.5 in December from 53.3 in November, registering its highest growth since end-2012 and its 14th straight month above the 50-mark that separates growth from contraction.

However on the flipside, The Central Government’s fiscal deficit for the April-November period touched 99% of the Budget estimate for 2014-15.

Sectorially,

Capital Goods, Power & Metals ended the week with highest gains to the tune of 4%, followed by IT, Banks & Realty closing 2.5-3% in the green. Pharma & Auto Sector also contributed with 2% gains while FMCG & Oil & Gas sectors acted as laggards.

On the Global Front,

Hong Kong Markets closed 3% positive followed by Indian Markets which ended the week with a 2.4% gain. On the other hand Japanese Markets closed with a 2% cut followed by US Markets closing 1.5% in the red.

US Dollar has continued to strengthen past 91 levels which is signaling caution for emerging market currencies & commodities world-wide.

CNX Nifty (CMP 8395):

Last Week, Nifty exactly rebounded from 8210 which was 38.2% retracement of the rebound from 7963 (17th Dec) to 8364 (23rd Dec) and closed above its 50 DMA as well as above crucial resistance zone of 8350.

Since last Week Indices rallied on lower volumes, Expect Index to retest & find support around 8290-8310 zone & if 8290 holds, Index could continue marching upwards upto 8530-8550. 

If Index breaks & sustains below 8290, would witness a retest of support zone around 8150-8060 zone. 

Breadth of the markets remained positive, however on Lower Volumes. Hence the Price-Action in the coming week would be extremely crucial.

RSI, Stochastic & MACD are placed above its averages on daily charts with Stochastic placed above its averages on weekly charts too.

Nifty has once again closed above its 50 DMA which would lead to buying support on dips.

However, RSI & MACD are placed below its averages on Weekly charts indicating some profit booking from higher levels.

Hence Range for the coming week could be 8285-8530.

On the Derivatives Front,

NIFTY saw long built up 4% OI add, with price ending W-o-W up by 2.3%; On Options front, 8200 PE saw Max addition, W-o-W with total OI at 45.57 Lakh Shares; on CE front unwinding witnessed across the board, with Max. OI at 8600 levels total OI 36.61 Levels. Implying range as per writers 8180-8580.

BANKNIFTY (CMP 19057):

Bank Nifty has given a break out & closed 3% positive for the past week.

Expect Index to retest & find support around 18800-188200 zone & if 18800 holds, Index could further witness further upside upto 19350-19400. 

If Index breaks & sustains below 18800, would witness a retest of support zone around 18400-18350 zone. 

 

On the Derivatives Front,

BANKNIFTY another week of outperformance W-o-W up 2.7% with long Positions adding up to the tune of 18%. On Options front highest OI in 18000 PE and 19500 CE both OI 4.35 Lakh Shares and 4.10 Lakh Shares, Implying range 17800-19800.

Going forward,

Movement of the Markets would be dictated by FII Fund Flows, Global Market Trends, movement of Rupee against the Dollar & crude oil price movement.

Q3FY15 results of Indian corporates slated to be announced starting January 2015 would be on the Investors radar & close watch would be on the Management tone which would lead to a revision in the future earnings forecasts.

 

USDINR (CMP 63.17):

USD INR has stabilized in the past week between 62.90-63.80 zone with the Global Market Sentiments stabilizing.

Now Going Forward, Till Rupee holds 62.3 zone, would once again move upto 64.70-65 zone.

Below 62.3, would retest 60 zone.

 

BRENT CRUDE ($ 56.42):

Crude prices continued to soften upto 56$ i.e. 5 & a Half Year Low on account of further strengthening of Dollar.

It can still dip upto 53 zone but has approached extremely oversold zone & hence if 53 is held, a pullback upto 63-65 cannot be ruled out.

But overall from 63-65 zone, selling pressure would re-emerge.

DOW JONES (CMP 17,832):

Dow Jones has closed 1% lower past week on account of profit booking from higher levels amidst lower volumes on account of Christmas Holidays.

Now Going Forward,

Till support 17,650-17,700 holds, expect a rebound upto 18,550 zone. Below 17,650 can correct upto 17,200-17,100 zone.

Midcap: (CMP 12700)

NSE Mid-cap CMP 12,700 closed 3% positive for the week closing around its all-time highs. 

Going forward, till 12400 holds, Index could further witness further upside upto 13000-13100. 

If Index breaks & sustains below 12400, would witness a retest of support zone around 11800-11850 zone. 

Small Cap (CMP 11,308):

BSE Small-Cap CMP 11,308 closed 4% positive for the week closing just 2% away from its all-time highs.  . 

Going forward, till 10700 holds, Index could further witness further upside upto 11300-11450. 

If Index breaks & sustains below 10700, would witness a retest of support zone around 10400-10350 zone. 

VIX (13.81):

VIX has been hovering between 13 to 16 in the past week, however closed around 13.80.  

Going forward, till VIX stays below 17 i.e. 200 DMA, it can retest the support zone of 11 which would imply buying support at lower levels into the Markets.

Above 17, VIX could Spike upto 22-24 which would signal a possibility of a fresh sell-off.  

On the derivatives front,

• FII’s for the past week have turned net buyers in the cash & derivatives markets while DII’s have stayed Net Buyers for the 4^th consecutive week gone by.

• On a Weekly basis In Index Futures FIIs were Net Buyers to the tune of ` 1554 Cr with an open interest increase of around `2283 Cr which indicates Long Build Up in Index Futures by FIIs.

• Nifty Futures have closed at a 72 points premium as against a 68 point premium for the previous week.

Cumulative FII Derivatives Stats from 29/12/2014 to 02/01/2015:

Index Futures: +1552 Cr;

Index Options: +4413 Cr;

Stock Futures: +96 Cr;

Stock Options: +239 Cr

 
Cash Market:

FII: +873 Cr;

DII: +999 Cr.

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