Nifty is about to reach the peak with all energized investors. Last issue I mentioned that nifty was resting before touching a peak and that’s what happening currently on the chart. October is always consider to be a eventful month as we have quarterly earnings report and this month is considered to be a turnaround time in the history of equity markets. Though not always but yes for India this was slightly the same i.e., turning point for our investors. Economy of India is still in a dicey stage where inflation is at a rising stage and Industrial Production numbers aren’t still a cheering stage where it should be. But the FMCG and service sector companies have started showing improvement on fundamental grounds which is a sign of start of new long term Bull Run in coming years. Though we cannot rely only on that ground but combining other factors we can be bias towards a bull run. IT and Pharma sector has given a good results too with financial sector. Lagging sectors like commodity and Infra has yet not beaten street estimates which is a perfect sign of a bull run cycle as these sectors are always last to give a run.
Government had taken some interesting steps during October month. First, they cleared bill for Jet-Etihad Deal. Secondly, FIPB cleared cleared some deals worth Rs,.1213 crore recently. Thirdly, RBI governor has taken some calculated risk to control money flow by adjusting MSF twice this month. Fourthly, controlled import of Gold has driven Current Account Deficit (CAD) of the country down which is a good sign. On the other side US had a dead lock for almost 10 days for passing the budget. At last on 17th Oct they passed the budget with a statement saying that a tapering would still be delayed upto mid 2014. This was cheering for the currency’s outside US and even to Indian Rupee. Looking at the technical of USDINR I had initiated short for long term on our blog on 17th Oct and we still recommend to short over the view of 7-8 months.
Above is the USD/INR weekly chart and we could see that after a high we have seen a sharp downfall. It’s time for some short recovering on the weekly charts but indicators and wave patterns suggest some more downside in a long time scale. On daily chart 50 EMA is at 63.20 which could act as a strong resistance in near term. But now we could see some consolidation. Our recommendation on USD/INR is to short on every rise to 63.20 with downside tgts at 57.40/54.70 Sl:64
Coming to investors rocket (nifty) technical chart, we were bullish since last month issue at 5833 and we are intact with the view. Our 1st tgt 6212 on nifty has been achieved comfortably this October which I mentioned last month. Nifty has been taking strong support at 5 Weekly average. Indicators are still positive on all time scales but daily chart suggest that a pause is about to arrive pretty soon after a new life time high. We are in the 5th Wave of a larger 1st degree on the monthly chart and we could see this end rally anywhere between 6220-6500. Nifty just broke a small downside narrow channel today signaling a strong move ahead. We are bullish on Nifty as the Banknifty and Midcap index are in strong bullrun as per the charts. BankNifty has taken a strong support at 10600 and now we could see a move to close around 12300.
Our recommendation on Nifty: Hold longs on Nifty initiated last month at 5833 and book profits on next two tgts 6370 and 6500 with trailing SL at 6040 and 6200 on achievement of 6370
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Note: All the data and graph is as of 29thOctober 2013 closing
Disclaimer: I may have personal position in index and above mentioned stocks. Views and News mentioned above may have Errors and omissions. My views are biased more towards technical analysis. Please read and study the market carefully before investing on my idea. For any suggestion contact me on my email. Some words mentioned in article don’t mean their actual meaning. They are correlated for market.