Dear All,
Market Outlook
It was case of so near yet so far for bulls in its attempt to cross the hurdle of 8000 mark. The run-up towards 8000 hit a bumpy road on Thursday. Bank of Japan this week left its monetary policy unchanged and that seems to have disappointed markets world over with India being no exception.
Global markets were stunned by BOJ policy move to maintain status quo on the interest rates. Investors had earlier priced in a strong probability of BOJ unleashing more monetary stimulus. The economy is struggling from abysmally low growth and the need of the hour is more aid from the central bank.
The services and manufacturing PMI for month of April would be released next week. Corporate results on the other hand will continue to pour in with HDFC, Eicher Motors, TVS Motors and Siemens set to announce their earnings next week. Eicher Motors is expected to report a strong performance in Q4 FY16 on the back of highest ever sales for Royal Enfield and strong growth in volumes for VECV. We expect topline to see a growth of 55.9% yoy. OPM at consolidated levels are projected to be at 16.1%, an expansion of 181bps yoy and 47bps qoq. Standalone margins are expected to be at highest ever levels at 29%. PAT growth is expected to be at 82.6% yoy.
Technical View
Nifty index after gaining around 11.5% in past two months have started showing signs of consolidation. Past two weeks closing on index have seen Doji formation, which clearly suggests some indecisiveness for market participants from here on. For further bullish confirmation, index would need to cross above the weekly downward sloping trendline, which also coincides with 100-WMA placed at 8062. Hourly charts suggest support around 7775-7780 zone which can act near term support for index. Traders need to watch out move above 7991 which is breakout from NR21 pattern on the index.
F&O View
Nifty ends lower by 0.63%, while Bank Nifty relatively outperforms by settling week in a positive terrain on weekly close. On Nifty options chain, open interest additions seen at across the board with maximum open interest base at 8200 call and 7800 put strikes on May series. Decisive move above 8000 spot levels required for gaining further momentum on upside-failure to do so may attract some profit taking if Nifty fails to sustain above 7800 spot levels.
Happy Trading.
Please find attached herewith India Infoline Weekly Wrap
Warm Regards,
Amar Ambani
IIFL
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