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January Snapshot – Nifty 50

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CONTENTS Latest Updates Technical Analysis (M.A., PIVOTS, FIBO)

S&P CNX Nifty Bank Nifty Future BSE Sensex

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Latest Updates 07nd Dec – Chairman of McNally said that they recently bagged a landmark Rs 120 crore order which will mark the company’s entry into the road sector. The Company also bagged a smaller order worth Rs 20 crore for extension of a material handling plant which was set up earlier.

08th Dec The food inflation sharply eased to 6.60% in the year to Nov 26, government data on Thursday showed, from an annual 8.00% in the previous week. The annual fuel inflation remained unchanged at 15.53% in the latest week, data showed. The primary articles price index was up 6.92%, compared with an annual rise of 7.74% in the prior week.

09th Dec Finance Minister Pranab Mukherjee said that surging food and fuel prices amid weak global economic growth are adversely impacting GDP growth of the country. Business sentiments are down. Food inflation and high fuel costs in times of weak global growth are taking a heavy toll on the economies of many emerging countries, including India.

12th Dec – Index of Industrial Production (IIP) recorded a de-growth of 5.1% in October 2011, relative to the 11.3% growth in October 2010, extending the slowdown in industrial growth witnessed in the recent months (9.5% in June 2011, 3.7% in July 2011, 3.6% in August 2011 and 2.0% in September 2011).

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13th Dec – Parliament's Standing Committee on finance has opposed the government's proposal to hike the FDI limit for insurance companies to 49%. The house panel's report, which was tabled in parliament today, says that the panel cannot support FDI hike in insurance.

17th Dec – Against the food subsidy budget of Rs 60,572 crore for the current fiscal, the government has already released Rs 45,125 crore towards it by December 15. The food subsidy bill was Rs 62,929,56 crore in 2010-11 and Rs 58,242.45 crore in the previous fiscal, Food and Public Distribution Minister K V Thomas said in during the Question Hour.

21st Dec Ratings agency Moody's on Wednesday unified India's local and foreign currency bond ratings at Baa3 and said the outlook on the ratings was stable

22nd Dec – Tractor India's July-September quarter (Q2) gross domestic product (GDP) grew 6.9%, slowest growth in nine quarters. The economic deceleration is expected to continue in October-December quarter (Q3), says Montek Singh Ahluwalia.

23rd Dec – India's inflation is expected to ease to between 6 and 7% by March, Finance Minister Pranab Mukherjee said on Friday, a day after data showed a sharp easing in food inflation.

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24th Dec – The country's foreign exchange reserves fell by a whopping USD 4.67 billion to USD 302.1 billion in the week ending December 16 on the back of a dip in foreign currency assets, the Reserve Bank said here today.

26th Dec – India's infrastructure sector output grew 6.8% in November from a year earlier, sharply higher than the annual growth of 3.7% in November last year, government data showed on Monday. During April-November, the first eight months of the current 2011/12 financial year, the output rose 4.6%, compared with an annual rise of 5.6% a year ago, data showed. The infrastructure sector accounts for 37.9% of India's industrial output.

27th Dec – The union government's decision to sell Rs15000 crore of bonds on December 30 in an unscheduled auction will not increase its overall market borrowing for the second half of this fiscal year, a senior government official with direct knowledge of the matter told Reuters on Monday.

28th Dec – The food inflation eased to 0.42%, its lowest in nearly six years at least, and fuel inflation slowed to 14.37% in the year to December 17, government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 1.81% and 15.24%, respectively. The primary articles price index was up 2.70%, compared with an annual rise of 3.78% a week earlier. India's headline inflation has stayed above 9% for a year, despite 13 rate increases by the central bank since March 2010.

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TECHNICAL VIEW Moving averages Moving Averages

21 Day

50 Day

100 Day

200 Day

Daily Weekly

4731 4941

4851 5268

4944 5401

5213 4767

Fibonacci retracement levels (Weekly) SCRIPT

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

NIFTY

6336

5377

4777

4300

3815

2252

Weekly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

Nifty

5430

5227

5024

4945

4820

4741

4617

4413

4210

R3

R2

R1

P

S1

S2

S3

S4

5501

5133

5000

4765

4632

4398

4030

3662

Monthly Pivot SCRIPT Nifty

R4 5868

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Weekly Analysis :- S&P CNX NIFTY

If we look at a broader chart of Nifty, we can see it is working quite well with retracement of its rally started from 2252 (Nov 2008) to its peak at 6336 (Nov 2010). Nifty this month is expected to be sustain the consolidation phase or may go up due to following reasons: Nifty currently has breached its retracement level of 38.2% and has given a closing above this retracement, from past three weeks it is resisting that level, but now this has breached that level indicating strength in the near term.  This week it has given closing above its 200 weeks moving average hence that level would act as an important support level which may support Nifty to go up.  Nifty currently is following a downward channel making lower top & lower bottoms, Nifty after making lower bottom has now taken support of this level &now is ready to go up to make its new lower top i.e. near its upward resistance line which is at 5170-5200.

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Last week Nifty gave a closing before its 200 weeks moving average and if in coming weeks it trades above it; then we can see further short-term uptrend. Also it has given closing above its 38.2% retracement hence may see see a short term push up rally to 5150-5200 where it could resist its upward resistance line drawn from peak of 6336, breaking which further we can see a upward momentum to test its 23.6% retracement which comes near 5400. Moreover it may range in between 4640-5150.

Bank Nifty Moving averages Moving Averages

21 Day

50 Day

100 Day

200 Day

Daily Weekly

8355 9116

8684 10178

9104 10390

10074 8441

Fibonacci retracement levels (Weekly) SCRIPT

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

Bank Nifty

13320

10945

9505

8305

7150

3290

Weekly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

Bank Nifty

11097

10324

9551

9255

8778

8482

8005

7232

6459

Monthly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

Bank Nifty

12566

11242

9918

9438

8594

8114

7270

5946

4622

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Weekly Analysis :- BANK NIFTY

Here we had applied a retracement on weekly chart of Bank Nifty started from 3290 (Mar 2009) to its peak at 13320 (Nov 2010). Bank Nifty this month if may sustain this level or might been able to go forward, following are some key factors:ďƒ˜ Bank Nifty recently has broken its retracement level of 50%(8300) and has given closing above its 50% retracement, last week it has broken the level of 50%, hence if continued may test the retracement level of 38.2% (which is at around 9500). ďƒ˜ Bank Nifty this week has also broken its 200 weeks moving average and has given the closing above that hence it is expected that this level may act as an support level resulting a short term upward momentum. ďƒ˜ Bank Nifty currently is following an downward channel making lower top & lower bottoms currently has taken support of its lower support level, and is now ready to make new lower top in order to continue its trend .

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Bank Nifty this month has given its closing above its 50% retracement level, it has given closing above its 200 weeks moving average as well, level and in the coming weeks we can see upside expecting to trade above 50% retracement to test its 38.2% retracement which is around 9500. But, If Bank Nifty would not be able to sustain here and trades below 8400-8200 in the coming weeks then we can see a short term downfall to 81007800. Moreover Bank Nifty is expected to trade in the range of 8150-9850.

BSE Sensex Moving averages Moving Averages

21 Day

50 Day

100 Day

200 Day

Daily Weekly

15792 16455

16175 17554

16455 18000

17396 15878

Fibonacci retracement levels (Weekly) SCRIPT

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

Sensex

21108

17980

15980

14410

12810

10870

Weekly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

Sensex

17767

17188

16609

16382

16030

15803

15451

14872

14293

Monthly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

Sensex

19214

18092

16971

16563

15849

15441

14728

13606

12485

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Weekly Analysis

If we look at a broader chart of Sensex, we can see it is working quite well with retracement of its rally started from 7698 (Nov 2008) to its peak at 21108 (Nov 2010). Sensex this month is expected to be sustain the consolidation phase or may go up due to following reasons:ďƒ˜ This month it has crossed its 200 weeks moving average hence that level would act as an important support level and may go up from this point. ďƒ˜ Sensex has breached the retracement level of 38.2% and has given a closing very well above this retracement and it may further extend uptrend to test the retracement level of 23.6% which is around 18000. ďƒ˜ Sensex

currently

is

following

an

downward

channel

making lower top & lower bottoms & after testing its support line has retrace from this level to make its new lower top i.e. near its upward resistance line which is at around 17500-17600 hence we may see an short term upward rally.

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Monthly Snapshot - Nifty 50 - jan12  

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