Market Outlook For the Week:

Precisely as mentioned last week levels of 3800 came to market’s rescue with strong retracement support of 3775 levels (Refer Weekly Index Chart). It was spectacular week for both BULLS and BEARS with momentous price development action. Slower rate of inflation growth combined with expectation of inflation slow down cheered rate sensitive sector like REALITY and BANKING while Easing CRUDE prices fueled rally further as OIL & GAS sector made strong come back. CRUDE for the week have finally slipped below levels of $131/barrel another positive sign going ahead. In our morning note dated 17th July,2008 we had clearly mentioned INDIA Volatility Index (VIX) falling by 37.51% in a single trading session and it was highest intraday loss for the year of 2008. We continue with our recommendation informing traders to avoid fresh short till levels of 3800 is held on daily closing bases. On higher side levels of 4225 may see some profit booking however any close above that level may take NIFTY higher. Political uncertainty still looms on indices at large and as mentioned previously BEARS will use this opportunity as a final blow on indices. Chances of positive result from Q1 season may get discounted soon, as growth have slowed compared to previous year. Traders having un-hedged short position must monitor it with strict stop loss and in case of profit must capitalize on it. As for long position investors must wait some time for right opportunity. BUYING on DIPS advisable & PATIENCE for such opportunity will pay off well.

Sectoral Indices

BSE BANKEX (6188.89)

For the week we are covering BSE BANKEX. We have seen this index closing at levels of 6188.89 UP by 2.38% or by gaining 144.13 points. On Friday this sector has finally closed above 20 Day EMA. Although for confirmation one more day of UP Side is needed for any fresh UP Move towards level of 6850. On downside levels of 5700 must be held on closing bases for sustainability in short term. All in all, levels of 5700 on lower side and 6850 may act as a crucial levels going ahead. In this sector we have seen ICICI Bank (617.45/-) is trading very near to its short term hurdle of Rs.645/-. While volumes reported on FRIDAY was its highest since May, 2004. Price-Volume activity in next few days must be closely observed going ahead.

Click here to download full report

Reliance Money Disclaimer