Market View: 16th September 2013 and ahead

The markets saw a really strong move up in the past 2 weeks and has retraced most of it's losses of the July-August months pretty quickly. In a bear market, the fall is slow and the pullbacks are fast. We have seen fast down moves and faster retracements. This indicates a bear market but one should avoid 3500-4000 level predictions and just take the moves as and when they come without any bias. We had predicted a close above 5480 levels for this month and are intact on the view. Now coming to the charts:
A major resistance for NIFTY now is the 5980 mark which if breaks can add another 200 points to the rally. Nifty currently is at 5850.6 and the supports are 5740 and 5680. There is a major gap in this range and another one at the 5450-5550 range which probably will get filled in the coming time. Nifty could see consolidation in the 5640-5940 range for the next 2 weeks before any major movement on either sides. Indicators point to a pause in the rally and it seems that a temporary top has been formed but no deep fall is expected this month.

Bank Nifty Daily
Bank Nifty is near it's resistance of a falling trendilne and will see selling pressure near 10350 levels. The downside targets are 9700,9250 and 8850 levels. If however, 10350 is broken with good volumes, we could eventually be moving towards 11000 and 11700 levels in the medium term. Big Bear of Indian markets Shankar Sharma is confidently bearish on banking sector since past few months and has been spot on! He says that more downside is yet to come. A bullish sign is that BNF has crossed & closed above it's 34MA after months and this means that for sometime now, we won't really see any major downside yet.


The CNX FMCG chart seems to be forming a H&S pattern on the daily charts and the upside for the index seems to be limited to more 250-300 points to 17700-17900 zone with the potential downside target at 14500. ITC, HUL will give good trade opportunities in the coming time. if however, the 18000 mark breaks, then the targets are 18900-19500 and above.

 CNX Infra index is in a downside channel and the current rally seems to be heading towards the upside range of this channel at 2200 levels and then it might start another downmove to 1800 levels and below.

Trade opportunities come in Midcap mostly after a good rally in the bluechips. Midcap index has broken a down trend range and it could go upto 7560 and 8200 levels in the coming days. Correct stocks in the midcap space have to identified for good upmoves and we shall be on the hunt for the same.

USDINR - Yahoo Finance
We tripled our money in the 65PE this week and a major reason for our bullishness this month was the correction we expected in USD. The rising black range had seen it's top hit and then a good downmove, this coincided with Raghuram Rajan's appointment as the RBI chief and some good policies taken by him helped the INR. In the long term, as we see that USD had broken the top of a rising range (RED) and these kind of breaks don't last long. Thus, our medium term target on the USD is 55 and below. In the short term, USD might now see a new upmove in USD which could even take it to 70+ (74 approx) levels before any majore downside begins.

So this is our analysis of the current situation we stand in. Wishing you many profitable trades ahead!

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