Frequently buying by
foreign institutional investors, by supporting firm trend in global markets and IIP data
showing a surge in industrial production in March lifted indices Sensex and
Nifty up by over 2.5% last week. Sensex ended the week with a gain of 507
points or 2.6% at 20,083, a 14-week high, the Nifty hit its best levels in more
than two years, closing at 6095 gaining 151 points or 2.5% along with midcap
and smallcap stocks too jumped higher on strong buying support, the BSE Midcap
and Smallcap indices moved up by around 2.3%. FMCG heavyweight which hit a new
high last week ended stronger by 6.7%. IT stocks were back again and successfully
gain with some encouraging economic data from U.S. side. Auto sector had given
strong jump too with market. Tata motors was the star performer in Auto sector
gained 8% last week. While Coal India declined 5.7% and Sun Pharma was down 5%
last week.
In economic news
India’s industrial production rose 2.5% in march 2013 as compare to a revised
0.46% growth in February 2013.
After two days consolidation Nifty gave breakout and
went above 6100 and closed above 6100 on Saturday special session. Bias is
strong positive. Nifty has not given any single day closing below previous bar
since it reversed from 5480 level in this up leg. According to Nifty daily
chart momentum indicators are in overbought zone indicating nifty may tired any
time. According to nifty hourly chart rising wage/ending diagonal pattern has
formed on the chart, indicating that price may face resistance very soon and
may turn its face towards downside. I still assume that This up move is a
corrective wave according to wave principle. Break below the trend line which
is drawn on hourly chart may drag nifty towards 5880 level but remember one
thing that we have not got any price wise sell or reversal signal. Highest open
interest in 6200 call indicating upper boundary for the current series.
In the last session FIIs bought 11104 contracts of
index future worth Rs. 337.34 cores with
increasing in open interest. As nifty Future was up 50 points and open interest
increased in index future indicating that fresh long position was created in Friday’s
session.
LAST HIGH - 6105 LAST LOW - 6045
WEEKLY HIGH - 6105 WEEKLY LOW - 5867
5 DMA DAILY - 6046
20 DMA DAILY- 5844
WEEKLY HIGH - 6105 WEEKLY LOW - 5867
5 DMA DAILY - 6046
20 DMA DAILY- 5844
50 DMA DAILY- 5783
200 DMA DAILY- 5703
Several top companies quarterly result still to come out in
coming week, investors are advisable to tread cautiously over the next few sessions. Global factors
will continue to make an impact on the Indian market.
Sustained
inflow of funds from FIIs was one of the major contributors for the market's
rise to multi-month highs last week. And the trend is likely to continue for a
while, But we are getting negative divergence sign on momentum indicators,
giving warning sign. However we have no
significant negative news is around to warrant a sell-off.
Dr Reddy’s
Laboratories, Bank of Baroda , Bajaj Auto, and Reliance Infra will announce their quarterly results during
the course of next week. The data on consumer price inflation for rural and
urban India for April, to be released on Monday and it will set the further trend
for the market in the beginning part of week. Encouraging report on industrial
production of march will help keep the mood positive for a while but technical
indicators are giving overbought indication so mood may turn cautious and even
bearish any time, as no big positive triggers are in the market ahead. A
positive close on Wall street may set up a steady start for the Asian Markets
on Monday. In the latter part of week market may remain into sideways to
negative. In the below Advance -decline chart market is showing in up trend but advance -decline ratio is in negative divergence indicating possible reversal in near term.
chart source www.icharts.in
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