Dow Jones 30 and NASDAQ 100 Price forecast for the week of December 11, 2017, Technical Analysis

Stock markets around the world continue to find reasons to go higher, this week it was a stronger than anticipated jobs number.

Dow Jones 30

The Dow Jones 30 has gone back and forth during the week, forming a slightly neutral candle. I believe that pullbacks at this point, which I believe are also going to be very likely, should be buying opportunities. I believe that the markets will continue to go higher, and I think that the 23,500 level is massively supportive, and essentially the short-term “floor.” Overall, I do believe that selling is all but impossible, least not until we would break down below the 23,250 level, which would show a shift in attitude, and most certainly if we managed to break down below the 22,000 handle. In fact, at that point I think it would be a trend change. That seems very unlikely though, so these dips continue to be buying opportunities for those who are patient.

NASDAQ 100

The NASDAQ 100 has found enough support underneath to bounce and form a hammer again this week, and that tells me that the market is trying to break above the 6400 level, eventually reaching towards the 6500 level above. If we were to break down below the 6200 level, then we may go to the 6000 level eventually, but right now it appears that all stock markets are ready to rally, and that of course means that we will probably continue to see traders pick up these dips as value.

If we were to break down below the 6000 level, however unlikely at this point, then I would be a massive cellar as it would show just how quickly things have changed. When you look at the Stochastic Oscillator, it does look as if the market is overbought at this point, but it seems that nobody cares.

MORE WILL UPDATE SOON!!

S&P 500 Price forecast for the week of December 11, 2017, Technical Analysis

The S&P 500 pulled back drastically during the week, but found enough support underneath to turn around and form a hammer by the end of the week as the jobs number was slightly larger than anticipated in America.

The S&P 500 initially fell during the week, but found enough support later to turn things around and form a hammer at the 2650 handle. A break above the top of the candle should send this market to the upside yet again, as I think the market will go looking towards the 2700 level above. A breakdown below the bottom of the candle would be very negative, perhaps looking towards the 2600 level next. A breakdown below there should send the market much lower and towards the 2550 handle. Ultimately, this is a market that is bullish, and you certainly can’t sell, and it almost looks as if it’s ready to go into more of an impulsive move. This would line up with the “Santa Claus rally” that we will quite often see, as money managers try to pad their results for the last 12 months.

If we did breakdown at this point, that would be a very big surprise, as it typically doesn’t happen, and of course the jobs number in America was relatively decent. I think this remains a “buy on the dips” situation going forward, and I certainly don’t have any interest in shorting the S&P 500 as it has been so relentless, and it’s moved to the upside. In general, I believe the stock markets around the world are going to go higher in the S&P 500 will march right along with the rest of them. It looks as if the rally continues over the next several weeks.

   

MORE WILL UPDATE SOON!!

Outlook for Nifty Bank for the week (Dec 11, 2017 – Dec 15, 2017)

Nifty Bank closed the week on positive note gaining around 0.50%.

As we have mentioned, last week that support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24500 to 24600 where break out gap for the index is lying. During the week the index manages to hit a low of 24813 and close the week around the levels of 25321.

Support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24500 to 24600 where break out gap for the index is lying.

Minor resistance for the index lies in the zone of 25400 to 25500. Resistance for the index lies in the zone of 25900 to 26000 where channel resistance for the index is lying. If the index manages to close above these levels then the index can move to the levels of 26300 to 26400.

Range for the week is seen from 24700 to 24800 on downside & 25700 to 25800 on upside.

MORE WILL UPDATE SOON!!

Outlook for Nifty for week (Dec 11, 2017 – Dec 15, 2017)

 

Nifty closed the week on positive note gaining around 1.40%.

As we have mentioned last week, that support for the index lies in the zone of 10000 to 10050 where medium term moving averages and low for the month of November-2017 are lying. If the index manages to close below these levels then the index can drift to the levels of 9650 to 9700 where 200 daily moving averages and lows for the month of August-2017 and September-2017 are lying. During the week the index manages to hit a low of 10033 and close the week around the levels of 10266.

Support for the index lies in the zone of 10000 to 10050 where medium term moving averages and low for the month of November-2017 are lying. If the index manages to close below these levels then the index can drift to the levels of 9650 to 9700 where 200 daily moving averages and lows for the month of August-2017 and September-2017 are lying.

Resistance for the index lies in the zone of 10200 to 10300 where short term moving averages and break down levels are lying. If the index manages to close above these levels then the index can move to the levels of 10480 to 10520 where trend-line joining highs formed in the month of September-2016 and August-2017 is lying.

Broad range for the week is seen from 9900 on downside & 10500 on upside.

MORE WILL UPDATE SOON!!

Market Week Ahead: Gujarat polls, Fed meet among 10 things to keep investors busy

If the BJP wins by a big margin then the market could rally or hit fresh record highs, but if it scrapes through then there could be correction in the short term which would be a good buying opportunity.

 

Sharp recovery in last two sessions helped the market gain more than 1 percent in the passing week, ahead of the first phase of Gujarat elections on Saturday. The rally was backed by a latest survey which said that BJP is likely to win the Gujarat elections and positive global cues post Brexit deal. At the start of the week, the market was concerned after ABP-CSDS's opinion poll said that there could be tough fight between BJP and Congress.

The two-day rally indicates that the market may have digested BJP victory in Gujarat, but has not priced in a landslide victory, experts suggest.

According to them, there could be some more upside, but as we move closer to exit polls (after second phase voting on December 14) and the outcome of Gujarat elections on December 18, the volatility is likely to increase.

Majority of experts feel the BJP is likely to win Gujarat elections but the Congress may manage to get some voting share of BJP due to demonetisation and GST concerns.

If the BJP wins by a big margin then the market could rally or hit fresh record highs, but if it scrapes through then there could be correction in the short term which would be a good buying opportunity, experts said.

The market rallied 23 percent in 2017 as it, so far, has been hopeful that BJP is likely to win general elections 2019 and as result of which there will be consistency in economic policies and reforms.

"We feel other factors will take a back seat now as all eyes are on Gujarat election. The recent opinion polls indicate the ruling party, BJP, will retain the state, but may see loss of vote share," Jayant Manglik President Retail Sales Religare Securities said.

Hence, all focus in the coming week would be on Gujarat elections, though there are other important factors like Federal Reserve rate decision, CPI inflation and factory data due to be announced.

Manglik suggests keeping leveraged positions hedged, considering the possibility of volatile swings ahead. Nifty has next hurdle at 10,350, he said.

Mustafa Nadeem, CEO, Epic Research said as derivatives data suggested earlier as well the range for Nifty may continue to be larger as active strikes were at 10,100 to 10,500.

He expects the range in the coming week to be further squeezed to 10,150 to 10,400. A lot of action will depend on voting percentage in state and polls that may further give much decisive direction to the market, he said.

Here are 10 things that will keep investors busy next week:-

Gujarat Elections

Gujarat elections are very important for BJP being a ruling party in the state for more than two decades and Narendra Modi who had been chief minister before becoming the Prime Minister of the India.

The voting for first phase (for 89 seats of Saurashtra and south Gujarat) began in Gujarat on December 9 and the second phase (for 93 seats of north and central Gujarat) will take place on December 14. The results of polls will be announced on December 18.

All state elections lined up before Loksabha elections 2019 are very important for Modi government.

Federal Reserve Meet

The Federal Reserve is scheduled to meet next week (December 12-13). Analysts largely expect the central bank to raise interest rates by 25 basis points on Wednesday, for third time in current year. Short-term interest rate is currently at 1-1.25 percent.

Macro Data

In the coming week, we have few crucial numbers - November CPI & October industrial output data on December 12 and WPI inflation on December 14 - which were acting as breathing space for RBI to continue to maintain status quo.

"India's Industrial production which was at 3.8 percent, is crucial to watch as the revival seen in numbers need to be maintained or it was a one-off event. CPI inflation which was at 3.59 percent, highest in last few month but around comfortable levels will also be eyed," Mustafa Nadeem, CEO, Epic Research said.

Apart from that, balance of trade data will be released on Monday, current account on Tuesday and foreign exchange reserves for the week ended December 8 on Friday.

India's foreign exchange reserves increased by USD 1.2 billion to touch USD 401.94 billion in the week to December 1, according to the RBI data.

IPO and Listing

Hospital operator Shalby will debut on Friday, after its issue was oversubscribed 2.82 times on December 7.

The Rs 70-crore initial public offer of Astron Paper & Board Mill will open for subscription on Friday and close on December 19, with a price band of Rs 45-50 per share.

Technical Outlook

The 50-share NSE Nifty formed a solid bull candle for the second consecutive day in a row on Friday. With the 221 points rally in two straight sessions, the index is now trading above its crucial short-term moving averages and is on track to hit 10,350 levels as long as it trades above 10,121, experts feel.

"The sharp upside bounce in Nifty could be cheering factor for bulls to make a comeback and this upside momentum is likely to continue for next week," Nagaraj Shetti, Technical Research Analyst, HDFC securities said.

The overall chart pattern is indicating a possibility of further upside potential up to 10350-75 levels by next week and there is a possibility of near term downward correction from the highs, he added.

Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities said, "The Nifty formed a Bullish Candle on the Daily chart. It managed to surpass its 50 DEMA and covered its half of the losses made in a previous week. It has to continue to hold above 10,178 to extend its move towards 10,350-10,400 zones while on the downside support exists at 10,150 then 10,094 mark."

FIIs and DIIs

FIIs and DIIs data will be of a crucial importance to watch out for in the coming week, especially before and after the outcome of Gujarat elections (December 18).

Foreign institutional investors were net sellers in four out of five sessions last week as they sold Rs 4,161 crore worth of shares but they were net buyers to the tune of Rs 19,180 crore worth of shares in November.

Domestic institutional investors have been net buyers since April 2017. In current month, they bought nearly Rs 5,200 crore worth of shares, following Rs 9,200 crore worth of buying in November.

Stocks in Focus

On Monday, Unitech may continue to lock at upper circuit after The National Company Law Tribunal on Friday allowed the government to appoint 10 nominee directors.

Hexaware may react positively after a media report indicated that Baring Asia is looking to sell 10-15 percent stake in company through block deals.

Axis Bank will be in focus as the bank received approval from shareholders to raise Rs 11,626 crore by selling a stake marquee investors.

IL&FS Engineering Services stock is likely to open higher on Monday on winning pipeline laying contract worth Rs 216 crore.

Small steel companies will be in focus after CNBC-TV18 reports quoting Cogencis that Steel Minister will consider iron ore price cap.

Max India may react negatively after Delhi Health Minister cancelled license of Max Hospital at Shalimar Bagh.

Global Cues

Global cues are likely to help the Sensex open on a positive note on coming Monday. Stronger-than-expected jobs report pushed Wall Street to record close.

Crude oil price movement will be closely watched as Brent crude futures have been trading in a range of USD 61-65 a barrel after it crossed the USD 60-mark. On Friday, it settled at USD 63.40 a barrel on Chinese crude demand and threats of a strike in Africa's largest oil exporter.

Apart from FOMC's rate decision on Wednesday, Bank of England and European Central Bank's monetary policy meeting will be held on Thursday. Analysts don't expect any change in interest rates from both central banks but the commentary would be keenly watched.

On the economic data front, Japan's producer price index (PPI) data for November will be released on Tuesday, core machinery orders for October on Wednesday and manufacturing PMI on Thursday.

In the US, November PPI data will be announced on Tuesday, CPI on Wednesday, manufacturing and services PMI on Thursday and November industrial & manufacturing production on Friday.

Europe's October industrial production data will be released on Wednesday and China's November industrial production on Thursday.

Some of the key economic data releases includes inflation data from the UK (CPI) and US (CPI and PPI), retail sales numbers from the US and UK, and jobs data from the UK and Australia.

MORE WILL UPDATE SOON!!

These top 4 stocks could give up to 61% return in 9-12 months

The Sensex ended at 33,250.30, rising 1.27 percent over previous week while the Nifty ended with a gain of 1.42 percent at 10,265.65 in the week gone by.

         

he benchmark indices bounced back in last two trading sessions to close the week with a gain of over 1 percent on hopes that BJP may win Gujarat elections.

The Sensex ended at 33,250.30, rising 1.27 percent over previous week while the Nifty ended with a gain of 1.42 percent at 10,265.65 in the week gone by.

Havells India | Rating: Upgrade to Buy | Target: 590 | Upside: 16 percent

The recent acquisition of Lloyd gives the company a strong foothold in the fast growing durables segment. The company's aim is to double revenue in the next three years through new product launches, expansion of existing product portfolio and increased channel penetration

The firm expects the sales growth of the company to accelerate, led by lighting, consumer durables, and Lloyd Electric and market share gains in cables/wires and switches.

The company is likely to report 21 percent EPS CAGR over FY17-20, with EBITDA margin expanding 40bp to 13.8 percent.

Granules India | Rating: Buy | Target: 200 | Upside: 61 percent

GRAN-Omnichem is a joint venture between the company and Ajinomoto’s subsidiary, Omnichem. But sales growth from the JV business will be impacted in the near term due to deferral of sales by a key client, though the company maintains its medium-term revenue growth guidance (of 20-25% CAGR) from Omnichem JV.

The company is planning to file approximately 25 ANDAs in the US till FY19. Of these, 12-15 complex ANDAs will be filed from its US-based Virginia facility and rest from India facility located in Gagilapur.

We firm believes that the stock has the potential to deliver more than 50 percent return in 12-18 months on the back of multiple re-rating and strong PAT CAGR of 27 percent till FY20E.

IOC | Rating: Buy | Target: 541 | Upside: 39 percent

Paradip complex, with its upcoming projects, would be a key earnings driver for the company, going forward.

The refinery is expected to produce 27% petrol, in addition to 42% diesel, 5% ATF and 8.6% petcoke.

Polypropylene with 2x340ktpa capacity is expected to be commissioned by December 2018 at a cost of Rs 35 billion. This would be even more profitable than the conventional projects due to the Indmax technology.

Among the OMCs, IOC has the most diversified EBITDA profile, with one-third coming from refining and marketing each, and the rest divided between petrochem and pipeline.

Colgate Palmolive | Rating: Buy | Target: 1355 | Upside: 30 percent

With the launch of Colgate Swarna Ved Shakti, along with a bevy of products likely to be rolled out over the next few years under this brand, the company can emerge as a strong play in the herbal/natural/ayurvedic sub-segment.

Colgate is an attractive play on a rural recovery and as the government schemes are falling in place and monsoon has been near normal, which is likely to lead to a sharp revival in earnings growth off a low base FY19 onward.

With the General Elections likely to be held in 2019, there is a strong possibility of the government coming up with more schemes to support rural demand in 2018.

MORE WILL UPDATE SOON!!