The week ahead: Tread with caution..by J Victor on December 5th, 2016
Decline in November auto sales numbers, weak Nikkei PMI for November, continued FII outflows and keenly awaited RBI policy meet kept the markets volatile last week. The benchmark Sensex and Nifty closed at 26,331 and 8087 after an initial up move. Many more factors such as absence of any positive triggers, stability of euro zone and continued stand-off in parliament keeps the investors concerned over the near term prospects of the markets. Hence caution becomes the buzz word for this week.
Moving ahead, it is possible the US fed rate may be hiked in the upcoming policy meet scheduled on December 13th. It is also important to note that weekly volumes have decreased over the last three weeks and the short term outlook of most of the stocks and the benchmark indices looks bearish. As far as the indices are concerned, a drop below the 8000 level will do more damage to the nifty. The Sensex is already running in bearish zone and a move beyond 26,500 is required to assume that anything is positive there. An emphatic move beyond 26,500 may bring back some buying interest among investors.
For the week ahead, we expect the indices to trade in a range of 25500-26500 for the Sensex and 7,800-8200 for the Nifty. Investors may note that there is no clear trend in the market and the volatility is high. At the same time, do not forget to pick up excellent stocks while the stock market keeps moving down.
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