Sunday, October 16, 2011

Nifty outlook for 17-10-2011


Daily Outlook
We were watching 5070 as trend decider level for the day and were expecting Nifty’s continuation of rising trend once move sustains above this level.  After opening lower at 5075 and recording low at 5056 level on Friday’s trade, Nifty rebounded smartly and surged at higher level above 5100 mark. Finally, recording day’s high at 5141 level, Nifty closed at 5132 by gaining 54 point.
On daily chart, Nifty has formed bullish powerful candle “Piercing Line” against previous day’s Red candle.  The formation of piercing line pattern which implies renewed buying pressure indicates further upside move in Nifty. In case, if Nifty breaches and sustain 5170 which is multiple top area then rise will get continue in coming session i.e. above 5170 will lead 5200 and above that expected  5330 level. On the contrary , if Nifty fails to hold  and  remain below 5170 then it will witness the intraday fall at 5120 level…( pls note , a sustainable move below 5120 will negate the “piercing line” patterns bullish effect which will the indication of temporary correction around 4940-4880 levels.)
(Remember, 5330 is 61.8 % levels of entire fall from 5700 level which we mentioned as “X” wave’s maximum target. Only sustainable move above 5330 levels will open the possibility of “B” wave…rare, as ABC pattern has ended in channel ( see weekly chart )which gives surety about current move from 4720 as wave “X” and not a “B” wave ….….as per the possibility of X, it could be  the subdivision of  x wave in the form of ABC Flat pattern…the current fall from the top of 5169 dated 08-09-2011 could be label as “B” of X as a triangle…and rise from 4728 could be label as “C” of Triangle . ) 
 
The trend decider level for the day is 5170 levels. A sustainable move above this level will continue the pullback in Nifty. However, failure to sustain above this level will force Nifty to fall at 5100-5120 level in intraday trade.
 Support  :-       1)  5120   2) 5080  3)  5040
Resistance  :-   1)  5170   2) 5210   3) 5250

Weekly Outlook
Nifty clocked the best weekly gain by ending the week  5% higher. After opening at 4886 against previous close of 4888, Nifty remained in rising trend and reclaimed 5100 mark.  Finally, touching weekly high of 5141, Nifty ended the week at 5132 level with the gain of 244 point.  Sector wise, all the sector closed in positive note but the major contribution were made by IT and Tech which kick started and surprised the market with 8.7% and 8% rise respectively.  The other contributors were as follow, Banking (gained 6.9% ), Relalty (gained 5%) , Oil( gained 4.8% )and Auto (4.19%), Metal (3.8%) Midcap (3.8%),  Power (3.2%),  Small cap (2.77%), FMCG (2.33%), PSU (2.12%), Cap Goods (2.07%), and Healthcare (0.98%).


In previous  weekly note dated 2nd Oct 2011, we said  ” the formation of thrusting line pattern indicates that the sellers who clearly dominant going in, look like to continue their winning streak until second week and after that bulls  will take over and will implement  partial turnaround which means complete reversal of bullish”. In Next week, Nifty fell down below previous week’s low which was 4758 and re tested 4720 level by correcting at 4728 and after that rebounded into “bullish reversal” which is continued till day by gaining more than 400 points in Nifty from 4728 level.
On weekly chart, Nifty has formed another green but Huge candle. This indicates completely dominant of buyer over seller. It look like that Nifty will continue the rising trend in next week. However, the possibility of short term correction from higher level cannot be ruled out on “Third Fibonacci week of rise”. In case, if Nifty fails to hold above 5230 which is 61.8% correction level of entire fall from 5741 to 4720 level and remain below psychological level of 5200 mark then  we will see fall in Nifty. In this case, Nifty will test 4880-4900 levels as a part of temporary correction in our view. However, a stable move above 5230 will lead continuation in rise in Nifty. In that case, Nifty will see at 5330 levels in coming session as we said.
The trend decider level for the week is 5230. A sustainable move above this level will lead continuation of rise in Nifty. However, failure to sustain will trigger the possibility of correction in Nifty.
Weekly Sup :-   1)  5050 2) 4960
Weekly Res :-   1) 5230  2) 5330  


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