Weekly market outlook - Arpit Jain, AVP at Arihant Capital Markets

Market Outlook

The equity benchmark NIFTY50 this week recovered sharply after three days of decline, Nifty50 Close above 10250 levels, buying was seen across all sectors, PSU Bank index outperformed and rupee rose most in over eight months against the U.S. dollar and On the valuation front NIFTY50 is trading at trailing price-to-earnings multiple of 26.3 x.

India's sovereign credit rating upgrade by Moody's Investor Services to 'Baa2' from 'Baa3' for first time since 2004, citing continued progress in the nation's economic and institutional reforms on Friday gave investors a big reason to cheer.

- Realty Shares Gain As Government Increases Carpet Area Of Houses Under PMAY (Pradhan Mantri Awas Yojana-Urban.)
- Sectors like Pharma, Infra and FMCG could continue to remain in focus

On macro front, CPI for rural and farm labourers for October will be announced on November 20. Crude, refinery output for October and Mobile subscriber data for October will be announced on November 20-24.

On the global front, Japanese Trade Balance data will be announced on Monday, November 20. US Existing Home Sales data will be announced on Tuesday, November 21. US Durable Goods Orders, US Unemployment Claims, US Crude Oil Inventories and US FOMC Meeting Minutes will be announced on Wednesday, November 22. Europe Flash Manufacturing PMI, Europe Flash Services PMI and ECB Monetary Policy Meeting Minutes will be announced on Thursday, November 23. Japan Flash Manufacturing PMI, US Flash Manufacturing PMI and US Flash Services PMI data will be announced on Friday, November 24.

Future Outlook: The current price action on weekly chart has formed a candlestick pattern that resembles a bullish hammer. This suggests that momentum on the upside is likely to continue.

In coming week if nifty trades and close above 10336 level then it is likely to test 10409 - 10481 - 10566 levels. However, if nifty trades and close below 10231 level then it can test 10158 - 10085 - 10000 levels.

Broadly, the undertone in the market has turned positive and any pull back in the range of 10255 - 10204 - 10123 should be used to go long, with a stop loss of 10066 for a target 10400 - 10600 levels in couple of weeks.

Source : Equity Bulls

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