The market as expected drifted lower after giving a downward breakout. It may test further lows before bouncing back.
Last week, the Sensex moved in a range of 582 points. From a high of 17,275, the index dropped to a low of 16,693, and finally settled with a loss of 2.33 per cent (399 points) at 16,720.
Among the index stocks, ACC, Infosys and Wipro ended with gains of 6 per cent each. BHEL, TCS, Tata Motors, Bharti Airtel and Larsen & Toubro moved up 2-5 per cent. On the other hand, Sterlite and SBI plunged 8 per cent each. Reliance, ICICI Bank, HDFC Bank, DLF, HDFC and Reliance Communications declined in the range of 4-7 per cent.
The Sensex is most likely to head towards 16,200. The index may find support around 16,500-16,360 during the week. On the upside, the index is likely to face considerable resistance around 16,925-16,940 levels. A strong move above these levels will ensure a turnaround for the market.
The NSE Nifty moved in a range of 178 points, from a high of 5,157, the index slipped to a low of 4,979. The Nifty finally closed at 4,988, down 130 points.
The Nifty is now trading below its short-term (20-days) and medium-term (50-days) moving averages, and likely to drift towards the 100-day moving average. The 100-day moving average is around 4,865, while the long-term (200-days) moving average is around 4,320.
The momentum oscillators suggest that the down move may gain momentum in coming days. So be prepared for further fall during the week.
A Myth
Stock Markets inflate when expectations of Growth
Reality
Stock Market when expectations of inflation
Govt all over the world running fiscal deficit, which means they will print money sometime, which means inflation expectations have propelled the stock markets, now that thing is priced in, if govt removes or doesnt add stimulus the stock markets will drop or consolidate
The biggest gaining stock markets (obviously in there own currency) is Zimbabawe and Chinese Index was below 1992 highs in Oct 2008
search google for niftywhatcanhappen to get answers on
stock market up - currency down correlation
stock market up - inflation up correlation
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