Week Ahead :
With the US, followed by the European economies, slipping into the recession fears, the global financial are expected to experience the heat in
the coming week also. The domestic inflation data which came at 11.99%, after sustaining above the 12% mark for a series of 3 consecutive
months, will possibly will be overlooked by the market.
The markets are expected to open the week in a negative note. However, slight recovery may be expected towards the later half of the coming
week.
Saturday, October 4, 2008
The week that went by
The week that went by
The most remarkable event which the Indian markets witnessed during the week that went by was the US’ sanctioning the Indo-US nuke deal.
However, this was not sufficient enough to overcome bearish sentiment caused by the global economic turmoil. NSE Nifty shed 167 points
(4%) and closed at 3818. BSE Sensex closed at 12526, losing 576 points or 4.4% from the previous week’s closing.
The global markets remained jittery following the uncertainties on the US government’s $700 Billion bailout plan to rescue the suffering
financial system. apart from this, the US government announced an additional package of Tax cut and raised the insurance coverage on
deposits. The US treasury will buy the illiquid assets held by the financial institutions. However, despite of sanctioning the bailout plan and the
other policy changes, the US markets and the other global markets continued the weakness, on fears that the $700 billion is not sufficient
enough to avoid a recession. The economic numbers released are still coming worse, which are indicating towards a possible recession.
Technical Outlook :
Bearishness is persisting in the market. The NSE Nifty and BSE Sensex failed to sustain above higher levels. During the last week, the indices
revised the 52 weeks low. Nifty recorded an intra-day low of 3715 and Sensex fell to 12153, before recovering slightly.
The weakness is expected to continue in the coming week also.
The Technical indicators are trading negative. MACD is still indicating continuance of weakness, while RSI is moving towards the oversold
zone. The bullish crossing of the Stochastic Oscillators in the daily chart, can be an indication for a possible pullback in the near future, But the
fact that in the Monthly chart, this indicator has again turned into Selling mode, after a bullish crossing, is adding to the concerns for Bulls.
At current levels, 3675 is the first crucial support for NSE Nifty. A failure to sustain above this can target the index towards 3400
levels in the coming weeks, with major support at 3515. The first resistance for the coming week is expected to come at 3930. The
index will find it very difficult to cross the Second resistance of 4080.
The most remarkable event which the Indian markets witnessed during the week that went by was the US’ sanctioning the Indo-US nuke deal.
However, this was not sufficient enough to overcome bearish sentiment caused by the global economic turmoil. NSE Nifty shed 167 points
(4%) and closed at 3818. BSE Sensex closed at 12526, losing 576 points or 4.4% from the previous week’s closing.
The global markets remained jittery following the uncertainties on the US government’s $700 Billion bailout plan to rescue the suffering
financial system. apart from this, the US government announced an additional package of Tax cut and raised the insurance coverage on
deposits. The US treasury will buy the illiquid assets held by the financial institutions. However, despite of sanctioning the bailout plan and the
other policy changes, the US markets and the other global markets continued the weakness, on fears that the $700 billion is not sufficient
enough to avoid a recession. The economic numbers released are still coming worse, which are indicating towards a possible recession.
Technical Outlook :
Bearishness is persisting in the market. The NSE Nifty and BSE Sensex failed to sustain above higher levels. During the last week, the indices
revised the 52 weeks low. Nifty recorded an intra-day low of 3715 and Sensex fell to 12153, before recovering slightly.
The weakness is expected to continue in the coming week also.
The Technical indicators are trading negative. MACD is still indicating continuance of weakness, while RSI is moving towards the oversold
zone. The bullish crossing of the Stochastic Oscillators in the daily chart, can be an indication for a possible pullback in the near future, But the
fact that in the Monthly chart, this indicator has again turned into Selling mode, after a bullish crossing, is adding to the concerns for Bulls.
At current levels, 3675 is the first crucial support for NSE Nifty. A failure to sustain above this can target the index towards 3400
levels in the coming weeks, with major support at 3515. The first resistance for the coming week is expected to come at 3930. The
index will find it very difficult to cross the Second resistance of 4080.
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