Nifty Monthly Report By MarketMagnify

NIFTY                                                                                  

DAILY CHART OF NIFTY FUTURE

FUNDAMENTAL ANALYSYS 

Fundamental news will drive movements in the market in the first half of the month of February. As many fundamental events lined up from the start of February month starting with FOMC statement on 31st JAN midnight followed by Union Budget which will be presented by Government on 1st of FEB.

Indian Market rally will depends upon the kind of budget which will be presented by the government of India on Thursday.

We can expect government to focus on infrastructure and increase its spending to boost the sector. Relaxation of taxes may occur which will give relief to middle class people.

Implementation of Direct Benefits Transfer for fertilizers could give major boost to the sector. Reduction in GST on household items can be positive for Consumer Durables Companies.

Corporate results are under process which will be another factor that will decide market movements as till now strong corporate earnings meetings estimates and optimism pertaining to few reforms which may announced in Budget have add contribution to the rally.

After this we have RBI monetary policy lined up on 7th of FEB.

 TECHNICAL ANALYSYS

From last couple of weeks we have witness strong rally in Benchmark Indices but most of the time market breadth was flat or negative in the market.

Nifty future is facing Trend line resistance on weekly chart started from 10 of OCT 2010 at current levels. Yesterday Nifty future tried to breach Trend line resistance level but only end up in giving false breakout which perfectly formed Evening star candle stick pattern which is bearish reversal pattern formed at the top of rally. RSI is also in overbought zone which suggest selling in the market. Most of the technical indicator suggesting that market is trading in overbought zone and correction is near the corner. We expect Nifty future to correct 4-5% from current levels and which will be buying opportunity for investors to add more stocks in their portfolio but for now we suggest investors to trade cautiously in the market.

Technically, Nifty future may move down below the level of 11050 and it could test the levels of 10800-10550 in the next month. Technical stop loss should be at 10230

Supports and Resistance (Monthly)

Resistance 1-      11210               Support 1-11050

Resistance 2-      11340               Support 2-10850

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