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October Monthly 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 07th OctTCS, Infosys to show sales growth, but order may crimp on global crisis. Tax collection up 22% in six month; September not as good.

06th Oct The Goods and Services Tax (GST), which is likely to be introduced next year, will lead to buoyancy in government revenues by Rs 1.5 lakh crore and increase the country's GDP by 1.4 to 1.6 per cent, industry body ASSOCHAM said.

05th Oct Bharat Heavy Electricals Ltd (BHEL) said it has secured a contract worth Rs 3,783 crore from an Independent Power Producer (IPP) for setting up a 1,320 MW thermal power plant (2x660 MW) in Madhya Pradesh. Wind power company Suzlon Energy today said it has bagged an order from state-owned GAIL for supply of wind turbines.

04th Oct Global ratings agency MOODY's Investor Service downgraded State Bank of India's "financial strength rating" to D+ from C- citing the low capital adequacy and the bank's recent failure to raise capital and deteriorating asset quality. Diversified Essar group is planning to list its infrastructure business in London next year, a move that could raise about Rs 3,700 crore for the Ruias-led conglomerate.

30th Sep SE Investment eyes disbursements of Rs 1200 Cr for FY12. www.capitalheight.com


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29th Sep India's food price index rose 9.13% and the fuel price index climbed 14.69 percent in the year to Sept. 17, government data on 29th Sep showed. PVR eyes 22-25% EBITDA margin, 45-55 screens for FY12.

25th Sep Ashok Leyland Limited, the flagship company of the Hinduja Group and one of the leading bus and truck manufacturers in the country, is scouting for acquisitions in BRIC countries, according to a top official of the company.

19th Sep The Reserve Bank of India (RBI) has raised the benchmark interest rates by quarter of a percent point, while keeping cash reserve ratio (CRR) rate unchanged. The repo rate now stands at 8.25%, while the reserve repo gets adjusted to 7.25%. The CRR remains unchanged at 6%. For the July-September quarter, Larsen & Toubro has reported that it has got orders worth over Rs 1000 crore.

16th Sep Retail chain Future Group Friday said it would consider exiting non-core business to lower debt and fund its growth plans.

13th Sep Shree Renuka Sugar not averse to sell minority stake in Brazil.

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TECHNICAL VIEW Moving averages Moving Averages

20 Day

50 Day

100 Day

200 Day

Daily Weekly

4959 5253

5022 5540

5274 5415

5433 4806

Fibonacci retracement levels (Weekly) SCRIPT

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

NIFTY

6336

5377

4777

4300

3815

2252

Monthly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

NIFTY

6251

5810

5369

5129

4928

4688

4487

4046

3605

Weekly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

NIFTY

5431

5236

5041

4965

4846

4770

4651

4456

4261

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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 more clearly may dissent to go down due to following reasons : Nifty currently is consolidating at the retracement level of 38.2% and has given a closing just above this retracement.  Nifty has made a double bottom near 4720 and if supported may see relief rally.  This week it has made closing above its 200 weeks moving average hence that level would act as an important support level.  Nifty currently is following an downward channel making lower top & lower bottoms & is currently on its support line & is expected to take support from this level and may go up to make its new lower top.

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Last week Nifty gave a closing above its crucial trendline and if in coming weeks gives a closing below this trendline and it trades below it; then we can see further downside and it may test the retracement level of 50% which comes around 4300. But, If Nifty sustains the level of 4900-5000 in the coming week and manages to give a closing above 5000 then we can see a short term pullback rally to 5200-5400 where it could resist its upward resistance line drawn from peak of 6336.

Bank Nifty Moving averages Moving Averages

20 Day

50 Day

100 Day

200 Day

Daily Weekly

9442 10277

9830 10940

10364 10376

10738 8457

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

Monthly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

BANK NIFTY

13160

11844

10528

9785

9212

8469

7896

6580

5264

Weekly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

BANK NIFTY

11140

10430

9720

9381

9010

8671

8300

9590

6880

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Weekly Analysis

If we put retracement on the weekly chart of Bank Nifty starting from 3290 (Mar 2009) to its peak at 13320 (Nov 2010), this month it is expected to sustain the consolidation phase or may go down more clearly and dissent to go up due to following reasons :ďƒ˜ Bank Nifty currently has broke its retracement level of 38.2% and has given a closing below this retracement. ďƒ˜ Bank Nifty currently is following a downward channel making lower top & lower bottoms & is expected to test its support level which is around 8500 to make its new lower bottom. ďƒ˜ Bank Nifty is trading near to its 200 weeks moving average and with banking sector in a negative sentiment; it may test its 200 DMA in coming weeks. Bank Nifty this month has given closing below its 38.2% retracement level and is expected to trade below this and if in coming weeks it gives the closing below the level of 8800; then we can see further downside and it may test the retracement level of 50% which comes around 8300. But, If Bank Nifty sustains the level of 9500-9600 in the coming week and manages to give a closing above 9600 then we can see a short term pullback rally to 10000-10400.

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BSE Sensex Moving averages Moving Averages

20 Day

50 Day

100 Day

200 Day

Daily Weekly

16500 17503

16730 18465

17557 18064

18136 16020

Fibonacci retracement levels (Weekly) SCRIPT

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

SENSEX

21108

17980

15980

14410

12810

10870

Monthly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

SENSEX

20727

19281

17835

17034

16389

15588

14943

13497

12051

Weekly Pivot SCRIPT

R4

R3

R2

R1

P

S1

S2

S3

S4

SENSEX

17917

17314

16711

16472

16108

15869

15505

14902

14299

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Weekly Analysis

Sensex this month is expected to be sustain the consolidation phase or more clearly may dissent to go down due to following reasons:ďƒ˜ This week it has made closing above its 200 weeks moving average hence that level would act as an important support level. ďƒ˜ Sensex currently is consolidating at the retracement level of 38.2% and has given a closing just above this retracement. Sensex has made a double bottom near 15765 & if supported may see relief rally. ďƒ˜ Sensex currently is following a downward channel making lower tops & lower bottoms and is currently on its support line and is expected to take support from this level and may go up to make its new lower top. Last week Sensex gave a closing above its crucial trendline and if in coming weeks it trades below it and gives a closing below this trendline; then we can see further downside and test the retracement of 50% which is around 14410. But, If sustains the level of 16400-16550 & gives a closing above it, then can see a pullback rally to 17000-17500 where it could resist its upward resistance line drawn from peak of 21108. www.capitalheight.com


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October Monthly Snapshot -Nifty 50