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Key benchmark indices clocked decent gains in a truncated last week as record hitting streak on Wall Street helped the upmove. A surge in index heavyweight Reliance Industries (RIL) and positive global stocks during the week also supported gains on the bourses. The Sensex moved above the psychological 29,000 mark in intraday trade on 23 February 2017. The Sensex gained 424.22 points or 1.49% to settle at 28,892.97. The Nifty 50 index rose 117.80 points or 1.33% to end at 8,939.50. The BSE Mid-Cap index rose 0.81%. The BSE Small-Cap index gained 0.89%Macroeconomic data, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in week ahead.

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Indian equity benchmark indices the S&P BSE Sensex and the Nifty 50 closed last on a sour note. The slide on the last trading session of the week is attributable to the caution ahead of US President-elect Donald Trump's inauguration later in the global day on Friday, 20 January 2017. Markets across the globe await a clear cut direction from Trump on US' economic policies. The Sensex lost 203.56 points or 0.74% to settle at 27,034.50. The Nifty declined 51 points or 0.6% to settle at 8,349.35.In the broader market, the BSE Mid-Cap index shed 0.43%, while the BSE Small-Cap index bucked the market trend by advancing 0.56% during the week. Positives such as the GST Council breaking deadlock over issues of administrative control over assesses, and broadly agreeing to rollout the GST from July 1 and the tax relief for foreign portfolio investors (FPIs) played a small role in supporting the indices.

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The Indian equity market started the week on a cautious note and closed lower on weak global cues and a weak rupee dampened the sentiments. The Sensex hit a 14-week low, while the Nifty hit its lowest level in more than 10 weeks. Heavy selling pressure was witnessed in Auto, Telecom, Industrial, Realty and Pharma stocks. Only Banking index managed to close in green. Nonetheless, the Indian equity market changed its tide and registered robust gains very next day on back of short covering and bargain hunting and this lifted the sentiments of market and closes with gains of 1.28% by the close of the week. The first rounds of earnings were out. Performance wise Financials have done well, IT has been mixed and Cement has been muted. Yes Bank’s second quarter performance surpassed analysts’ expectation with the profit rising 31.3% YoY. ACC misses estimates as profits dampen 29% and Ultratech Cement profitability improved in the September quarter but slower than expected cement growth surprised investors.

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Nifty close 8779 points: The Nifty opened with a downside gap and hit our crucial support level of 8696 points on Tuesday before staring a contra trend rise to the sharp decline 8968-8688 points. We saw a sharp gap up open on Friday where in the Nifty hit the 50-61.8% retracement area of the above mentioned decline but saw a sharp intra-day sell off as we had anticipated in the last week’s report. Finally the Nifty ended the week down (-0.98%). Now 23rd Sept is another crucial day where we expect another sell off which could test the recent low. If this low is taken out decisively in this anticipated fall then the short term uptrend of the Nifty might be under serious threat.

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Nifty close 8866 points: The Nifty opened with an upside gap and continued its rise hitting a high of 8968 points on 7th Sept 2016, where we saw some profit taking coming in after a gap up open on the daily charts. This resulted in further Bull unwinding on the last trading day of the week, which resulted in the Nifty wiping out almost all the gains of the week. It finally closed a meager 57 points higher (thanks to the R group stocks) than last week but it has made a “shooting star” pattern, which is an ominous sign especially if the Nifty closes decisively below 8696 points this week.

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Nifty close 8809 points: The Nifty opened flat but did not break the crucial support area of 8517-8543 points which it was holding above for the last 5 weeks. When it crossed last week’s high of 8684 points the Bears started scurrying by covering their shorts. This coupled with speculative buying as the Nifty broke above the recent top of 8728 points saw the Nifty hitting a new 52 week high of 8824 points. This has once again shifted the onus on the Bears to push down prices as the Bulls are sitting pretty.

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Nifty close 8666 points: The Nifty opened the week flat and ended almost near the same levels forming almost a “doji” after 2 consecutive “hanging men” in the weekly charts. We saw the lowest volatility of only 96 points last week. In fact since 29th July 2016 the market has been unable to make any headway despite the overall trend being up, which along with the above candlestick patterns raises some doubts about the sustainability of the current rise. However, one has to wait for confirmation that it’s over and that requires more evidence. The 8716-8845 points range is the stiff resistance area to watch out for at higher levels. We have seen the volatility getting compressed (forming an inside bar pattern) to a level which is unsustainable and a small burst on either side is likely this week or at best in the following week. From a traders perspective 8600 and 8696 are immediate support and resistance levels to watch out for. However, from a directional perspective 8517 is the absolute Stop Loss on longs that the Bulls should keep in close. The safest strategy would be to book profits in rallies to the above mentioned range as the risk/reward ratio is becoming skewed and wait patiently for the Nifty to play its hand.

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Nifty close 8672 points: The Nifty opened the week slightly better but then sold off to test the crucial weekly support of 8545 (in close) before recovering all the way back up on the last day of the week, closing with a marginal loss of 11 points (-0.13%). Thus the Bulls were also able to defend the recent low of 8517 points as the Nifty rebounded from a low of 8540 points. Therefore the 8517-8540 points range is now a crucial support going ahead from a short term trend perspective. It was yet another week of see-saw trade in which the Nifty recovered off from the lows to close very near the open of the week forming yet another “hanging man” pattern in succession. This implies that support is coming in at lower levels but if a big bearish candle comes in this week then the current uptrend might be under threat. However one has to wait for confirmation instead of jumping the gun but profit booking should be the norm at higher levels. The 8757-8845 points range is the stiff resistance are to watch out for at higher levels. The battle for control has intensified as shown by the 2 consecutive “hanging man” patterns. However unless and until we get a big bearish candle and break the support area mentioned above the advantage remains with the Bulls even though they have been unable to make any headway for the last 3 weeks. From a safety angle one should keep on booking profits in rallies.

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