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Indices fell last week after posting gains for two consecutive weeks. Last week, the Sensex fell 198.22 points or 0.69% to settle at 28,599.03. The Nifty 50 index fell 86.85 points or 0.98% to settle at 8,779.85. The BSE Mid-Cap index lost 294.81 points or 2.21% to settle at 13,051.51. The BSE Small-Cap index fell 96.52 points or 0.75% to settle at 12,764.87. Mixed signals emerged on the domestic front. Retail inflation moved lower, raising hopes of a possible rate cut next month. But sentiment remained downbeat as industrial output contracted, painting a dismal picture of the economy.Data released last Monday showed that the August consumer price index (CPI) slumped sharply to 5.05% from 6.07% in July, triggered by a sharp fall in food prices. The July index of industrial production (IIP) contracted by 2.4 per cent, compared with 1.95 per cent (revised) in June.

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Nifty close 8683 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 nominal gain of 45 points (+0.52%). Thus the Bulls were also able to defend the week before last’s low of 8517 points as the Nifty rebounded from a low o 8518 points. Thus this level is now a crucial support in close going ahead from here on from a short term trend perspective. The GST Bill will be tabled this week in parliament which will go through and the RBI policy is slated for Tuesday in which no rate is expected and will also be the last for the most pro active governor Mr. Raghuram Rajan. In short, the Bulls successfully warded off the Bear threat last week even though no major gains were made during the week. Looking at the see-saw movement last week we expect the fight for control intensify in the coming week. As long as the weekly support of 8637 points remains intact the Bulls are in control with upside targets of 8757 and 8831, this week. A breach of the weekly support could see the Nifty slip to 8564 or on the lower side 8444 points, this week. One should be very careful in stock selection from a trading perspective from now on and keep a strict stop loss on positions as the 8650-8845 range will see the tug of war intensify in the weeks ahead.

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