Nifty View: 27th January 2014 and Ahead - Expiry Week

Nifty is continuing it's range bound moves with the past week's (20 Jan 2014 - 24 Jan 2014) range being 6243-6355 (112 points). As given earlier in our monthly prediction, we expect NIFTY to close below 6325 levels. The RBI meet will be the main event to watch out this week. Another crucial point to take note of is the strength that $ is gaining against the rupee.
USD/INR Daily Chart
Dollar has given a strong breakout above 62 levels and it seems set to touch the 63.5-64 levels with 62 being a good  support as indicated in the chart above. The breakout zone and the 50DMA can give bounce to any fall in $. A rise in $ can put pressure on the market, but it also means that IT stocks will continue to be the safe haven for BULLS. 61.7-63.2 is the expected range for $. We had adviced a long position in $ on a break above 61.8-62 levels and maintain our view on it.

Nifty - Daily
Expected Range: 6210-6360
Nifty has been facing stiff resistance on every rise near 6350 levels and subsequent corrections from there. The 50DMA is giving support to NIFTY on every correction and the index is trading in a narrow range between these 2 levels. As per our view, the exhaustive gap NIFTY formed on 9th December, 2013 makes a medium term top and won't be broken easily. Below 6210, Nifty will head to crucial support levels of 6150. If 6150 breaks, then expect a 200 down move to 5950-70. The global markets have seen a sell-off in the last 1-2 trading sessions of last week and NIFTY could open considerably down this week. The markets will eye the RBI meet for further cues. For bulls, only above 6415 levels will NIFTY be able to see a sustainable rally. Also, a close above 6360 is needed for any positive momentum.
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