Market overview and tips for the week

Market Overview:

Nifty gave positive opening and extended its previous week’s rally to close at highest level in four weeks getting boost from positive global markets, global credit rating agency Moody's Investors Service raised India's credit rating outlook to positive from stable and commercial banks reducing their lending rates to benefit the end consumers. Market breadth indicating the overall health of the market was positive. Broad based buying was seen across the board led by banking, financials, infrastructure, Telecom and mid cap stocks.

Nifty  gave closing at 8811.45 with weekly gains of 178.35 points.

Technically, trend of Nifty  in short term is up; however it is expected to face strong resistance around the levels of 8600 – 8650 as it is also the retracement level of 61.80% of the recent fall and trade in a range of 8600 - 8850 levels. Next important resistance is at 9000 level while with the breach of its support level of 8600, some more corrections can be seen till 8450 level.

Upcoming Events:

WPI and CPI inflation numbers for March 2015 have been announced this week, which will play a crucial role for deciding market trend in near term.

Stock-specific action will be seen as Indian companies start announcing their earnings for the quarter ended 31 March 2015 in the coming week.

Trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in the near term.

Stock Recommendations:

BUY TATACHEM IN NSE CASH ABOVE 458 WITH SL OF 446 TGT 470,478

After showing correction from the higher level, now stock is trading in short term recovery phase, it is likely to continue the upside move in near term with the crossing of the resistance level of 458 as the stock is managing to sustain above the level of 458. One may get the targets of 470,478 in the stock with the stop loss of 446.

BUY SSLT IN NSE CASH ABOVE 204 WIT SL OF 194 TGT 214,220

It is looking weak on charts however it is accumulating above its major support level and recently has given breakout of its previous major resistance level, now it has next resistance at the level of 214; it is likely to experience fresh buying with the crossing of mentioned level, where one may keep the targets of 214,220 in the stock with the stop loss of 194.

SELL SIEMENS FUT BELOW 1442 WITH SL OF 1462 TGT 1422,1410:

The stock is in bull run and is forming a reversal pattern in short term charts, it is likely to show correction with the breach of the support level of 1442, where one may initiate the short position in it for the targets of 1422, while stop loss can be placed at 1462.

BUY BHARARTFORGE IN NSE CASH ABOVE 1350 WITH SL OF 1300 TGT 1400,1425

Primary trend of the stock is bullish and is consolidating at the higher level after showing correction. It is expected to continue the bull run with the crossing of the resistance level of 1350, as the stock is sustaining above its 200 and 50 days moving averages. One may initiate the long position above the mentioned level for the targets of 1400 and with the strict stop loss of 1300.

BUY TVSMOTORS IN NSE CASH ABOVE 259 WITH SL OF 247 TGT 271,280

The stock is showing correction since past few sessions and also sustaining above lower trend line support level. Currently it has formed reversal pattern on the short term charts and trading below the resistance level of 259.Breakout of its resistance level may show recovery in it where traders can expect targets of 271 and 280 while major support of 247 can be placed as technical stop loss.

Market choppy ahead of RBI policy today

Market Overview:

Market given gap up opening and later traded with the positive momentum throughout the week as a result of short covering. It continued positive momentum on the last day of weekly trading session, led by gain in Banking and Pharma sectors. Nifty Future shut shop at 8633.10 with the net gain of 198.20 points after giving closing in red for the last three consecutive weeks.

Market may rebound further with the crossing of its crucial resistance mark of 8660 as it has showed strong pull back from its crucial support level of 8350 and is sustaining below the level of 8660 ,while support for the Nifty future is at 8420, with the breach of this it may correct further till the levels of 8170.

Market is choppy ahead of Crucial bi-monthly monetary policy announcement which is being keenly watched. 

Upcoming Events:

1. The Reserve Bank of India will declare the decision on interest rates in its first bi-monthly Monetary Policy for the FY 2015-2016 on Tuesday, 7th April  2015. It had cut the rate by 25 basis points in an unscheduled monetary policy review on 4 March 2015.

2. The government will unveil industrial production data for February 2015 on Friday, 10th April 2015.

3. The next major trigger for the Indian markets is Q4 results of India Inc. The Q4 results season starts during second week of April 2015.

Stock Recommendations:

BUY DHFL IN NSE CASH ABOVE 475 WITH SL OF 459 TGTS 491/500

Overall trend of the stock is bullish and after experiencing correction from the higher level, now the stock is accumulating below the resistance mark of 475, further the stock is sustaining below the downward sloping trend line and is likely to continue the northward journey with the crossing of the resistance level; as it is managing to sustain above its 50 and 200 days moving averages with the RSI of 41.95. One may initiate the long position in the stock with the crossing of the 475 and can expect the targets of 491 and 500 in the stock, Support of 459 can be placed as stop loss in it.

BUY IOC IN NSE CASH ABOVE 375.50 WITH SL OF 365 TGTS 386/395

Primary trend of the stock is bullish and after giving breakout of its range bound movement, it is forming continuation pattern in short term charts, it is likely to continue the positive movement with the breakout of the pattern at the levels of 375.50 ; as the stock is managing to trade above its 50 and 200 days moving averages with the RSI of 66.65, one may expect the targets of 386 in the stock if it manages to sustain above the immediate support level of 365.

BUY ADANIPORTS IN NSE CASH ABOVE 317 WITH SL OF 302 TGT 332/342 

After experiencing correction from the higher level, the stock is accumulating below the resistance mark of 317, further the stock is sustaining above its major support level and is trading above its 200 days moving averages with the RSI of 46.71, it is likely to show fresh buying with the crossing of the resistance mark of 317, where one may initiate the long position in it for the targets of 332/342 and with the stop loss of 302.

Fundamental & Technical Outlook on Commodities:

Precious metal: Gold price fell in Asia on Thursday as investors braced for a U.S. jobs report expected to set the timing for the Federal Reserve to hike interest rates this year as widely expected, while news of a nuclear deal with Iran was being assessed. U.S. markets are shut on Friday, but data on non-farm payrolls will be released. Investors focused on Friday’s U.S. employment report, which was forecast to show a gain of 245,000 jobs in March, following an increase of 295,000 in February.

Over all, MCX Gold June future is in consolidation and sustaining in range from the last week. For the coming week 25700/25500 will act as a major support whereas 26500/26800 will act as a major resistance level in MCX Gold June future. For the next week in MCX Gold, traders can use sell on higher level strategy, if MCX Gold June future sustains below the levels of 26200 then it could test the levels 26000/25700.

 Technically, MCX Silver May futures is in consolidation and sustaining on lower levels. So for the coming week 41500/43000 will act as a major resistance levels where as 38000/36600 will act as major support in MCX Silver May futures. For the next week in MCX Silver futures, traders can use sell on higher level strategy, if MCX Silver May futures sustains below 37000 then it could test the levels of 36000/34700.

Energy: Crude oil fell the last session while was extending its losses on Tuesday as markets continue to talk about the finalization of the deal between Iran and Western countries over its co called nuclear program. On late Thursday, details emerged that Iran and Western powers had reached a deal on the framework of a preliminary Iranian nuclear pact before a final agreement could be reached in late-June.

"This framework would cut off the pathway Iran could take to develop a nuclear weapon," U.S. president Barack Obama said at a news conference outside the White House. "This deal is not based on trust, it is based on unprecedented verification."

For the coming week 2800/2600 will act as major support levels whereas 3200/3380 will act as a major resistance in MCX Crude oil April futures. For the next week, trader can use sell on higher level strategy, if MCX Crude April future sustain below 2950 levels then it could test the levels 2810.

Base Metal: Copper prices were little changed on Thursday, as market players looked ahead to the release of key U.S. employment data for further indications on the strength of the economy and the future path of monetary policy. Futures were likely to find support at $2.709, the low from April 1, and resistance at $2.792, the high from March 30. Official data on Wednesday showed that China's manufacturing purchasing managers' index inched up to 50.1 this month, while the China HSBC (LONDON:) final manufacturing PMI was revised up to 49.6 in March. MCX Copper April future is in bearish trend and sustaining on lower levels. So for the coming week 388/405 will act as a major resistance levels where as 345/327 will act as major support in MCX Copper. For the next week trader may follow sell on higher levels strategy, if MCX Copper April future sustain below 372 levels then it could test the level of 360/345. 

Gold Looks Weak on Geo-political Risks

Commodity Overview of the week: Last week MCX Gold April futures price had given bullish movement for the entire week and made a high of 26988 during the week. Geo-political tension in Middle-East after Saudi Arabia and its Gulf Arab allies began a military operation in Yemen coupled with delay in raising interest rates by Federal Reserve supported the Gold prices.

COMEX Gold futures prices sustained above its support level of $1180 per ounce and broke its major psychological level of $1200 per ounce during the week and sustained above it. Gold had gained strength after the Fed sounded cautious at its policy meeting last week about the pace of any interest rate increase, prompting the dollar to fall from multi-year highs. Gold fell on Friday, after a seven-day rally as investors remained cautious ahead of comments from U.S. Federal Reserve Chair Janet Yellen. Even after Friday's losses, gold was on track to finish the week up around 1.5 percent, its longest gain since August 2012. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 7.16 tonnes to 737.24 tonnes with marginal decline of around 1% on weekly basis till Friday.

Silver MCX May futures prices followed the trend of gold and witnessed bullish movement for entire week. Silver MCX May futures tested the level of Rs. 39000 during the week with overall gain of more than 2 percent on weekly basis. COMEX Silver also sustaining above the level of $16.60 an ounce.

According to WGC there is an inverse correlation between gold and the dollar. As per data, between early 2014 and 20 March 2015 the dollar rose by 20% while gold only fell by 1.2%. Historically, the gold price rises more than double on a weak dollar than it falls on a strong dollar. When the dollar falls, gold has gone up 14.9%; When the dollar rises, gold has fall down 6.5%, WGC data reveals.

On domestic front, Gold bullion purchases across Asia slowed this week as a long rally in prices discouraged buyers with traders keeping a close watch on top consumer India ahead of Akshaya Tritiya that usually sparks strong demand for the metal. Before falling on Friday, spot gold had rallied continuously for seven days till Thursday, its the longest rally since 2012 on a softer dollar and caution from the Federal Reserve over US interest rate hikes. The softness in demand comes ahead of April's Akshaya Tritaya festival, when it is considered auspicious to buy gold. Apart from sustained festival season buying by jewellers,a firming trend in global markets as geo-political tension in Middle-East boosted demand for the precious metal as a safe-haven, helped gold to trade above the Rs 27,000-mark.

This week, we can expect Bullish movement in Gold MCX April futures & it can test the levels of 27100 - 27350 on the higher side till the end of week. Similarly Silver is also looking bullish on the charts and MCX Silver May futures can test the levels of 39500 - 39800 on the upper side if it manages to sustain above 39000.

For this week, major U.S. data such as CB Consumer Confidence, ADP Non-Farm Employment Change, ISM Manufacturing PMI, Trade Balance, Unemployment Claims, Non-Farm Employment Change and Unemployment Rate, geo-political situation in Middle-East and festive demand in Asian region will further provide direction to the bullion.

Market overview and stock recommendations for the week

MARKET OVERVIEW: Nifty Future gave positive opening but remained under pressure and extended its losses, hitting its lowest level in more than ten weeks due to geopolitical tensions, an increase in global crude oil prices. High volatile was witnessed throughout the week as market breadth indicating the overall health of the market was weak. Broad based selling was seen across the board specifically led by banking and IT sectors.

Nifty April Future gave closing at 8434.90 with weekly loss of 167.15 points.

Technically, intermediate trend of the Nifty Future in short term is down; however it is expected to see some retracement of the current fall and trade in a broader range of 8350 - 8650 levels and with the breach of its support level of 8350 and may test the next important support level of 8170. While resistance for the Nifty Future is at 8650 levels, above which some positive movement can be seen in the near term.

 

UPCOMING EVENTS:

·         The trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar, and crude oil price movement will dictate market trend in near term.

·         The next major trigger for the Indian markets is Q4 results of India Inc. The Q4 results season starts during second week of April 2015.

·         The government will also unveil fiscal deficit data for February 2015 on Tuesday, 31 March 2015.

 

STOCK RECOMMENDATIONS:

CAIRN FUTURES

Sell Below – 215

Stop loss- 220, Targets – 210,205

Overall trend of the stock is weak and is consolidating with the negative bias from the last few session, it is likely to show further downside move with the breach of its support level of 215, as the stock is sustaining below its 50 and 200 days moving averages. One may keep the targets of 210 in the stock with the stop loss of 220.

 

KPIT

Buy Above- 191

Stop loss- 181 , Targets –201,210

The stock is sustaining below the falling trend line after the recent corrective movement and is likely to continue the upside journey with the crossing of the resistance mark of 191 as it is sustaining above its 200 days moving averages, one may expect the targets of 201-210 in the stock in upcoming session with the stop loss of 181.

 

HINDALCO

Buy Above- 137

Stop loss- 128 , Targets –146,153

After the short term correction phase , it has accumulated below the major resistance mark of 137, and is trading with the RSI of 57, therefore buying opportunities can be seen in the stock above the level of 137, where longs can get accumulated for the targets of 146-153, while stop loss can be placed at 128.