Mktviews Weekly Nifty Analysis (23/04/2012 - 27/04/2012)

 

Markets are crucially poised after closing 1.6% positive on a weekly basis post rangebound trading admist high volatility on a/c of sharper than expected rate cut by RBI in its monetary policy announced on 17 April 2012. 

Key indices surged 1.6% for the week while mid-caps & small-caps gained 1.4% & 1.26% compared to last week. Sector-wise Auto, Metal & FMCG remained top gainers while those on the losing side were Oil & Gas, Power and Capital Goods. 

RBI in its monetary policy on 17th April 2012 announced a sharper than expected repo cut of 50 bps, a first cut after 13 successive hikes in past 18 months. 

However few riders were attached to this rate cut which did not allow the markets to rise in a gung-ho manner. RBI governer announced that scope for any further rate cuts is limited on account of inflationary as well as fiscal deficit concerns. He also stated that further cut in interest rates will depend on the macro economic factors which must improve from the current levels. 

 

Global markets have painted a mixed picture post mixed economic data from US as well as positive outlook for the world economy by IMF. Also 

successful bond auctions from France & Spain lent support to the European Markets. 

 

Corporate Results announced so far have been fairly good with HCL Tech, HDFC Bank, Yes Bank all in-line with market expectations. 

With Important Results like  TCS, Sesa Goa, Wipro, Sterlite, ICICI Bank, Axis Bank, Jindal Steel & Maruti due next week and F&O expiry on Thursday, 

Movements are likely to be volatile & markets may break-out of the frustrating range of 5190-5370. 

 

India's trade deficit hit a record new high worsening the external balances & further weakening of the rupee which has slipped for the 3rd consecutive week to 3-Month lows of levels as low as Rs 52.07 compared to Rs 51.35 a week earlier registering a fall of 1.45%. 

 

With Rupee weakening, pending fuel reforms & controversy surrounding the GAAR still remaining a major overhang, the chances of upside remains limited and thus capped. 

 

Nifty Future is displaying reluctance to cross & sustain above 5390 or even break 5185 as selling pressure is witnessed on all rises & buying support emerging at lower levels resulting in Nifty to oscillate between 5200-5400 range with highest OI built up in 5400 Call Option & 5200 as well as 5100 Put Option. 

Use any pullback upto 5380-5395 to reduce your Long positions as bouts of selling pressure would be witnessed on all rises. If 5410 is not crossed & sustained, then it may only be a pullback & not a bullback. 

 

Going Forward,

If Nifty Future fails to cross above 5410, will trade in the range 5184-5410. 

Strong support lies @ 5185-5195 & selling pressure would intensify upto 5060/4937 only if Nifty Fut breaches & closes below 5184. 

Further upside upto 5538/5610 would be witnessed only if critical resistance area of 5395-5410  is crossed & Nifty Futures closes above it. 

 

Regards,
Team Market View Investments. 
Mo : 9987750901. 
Visit www.mktviews-nifty50.blogspot.com
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