Archives : GROWTH ORIENTED BUDGET; NIFTY HANGS IN BALANCE - 28/02/2015.

GROWTH ORIENTED BUDGET; NIFTY HANGS IN BALANCE - 28/02/2015. 

NO FREEBIES FOR AAM AADMI.

Besides being the most awaited Budget of recent times, it was also the first full budget of the Modi government. The FM had a tough job at hand as the expectations had reached the sky. Mr. Arun Jaitley delivered a Budget, which was not only big on ideas but also attempted to cover and address various tricky areas which have been discussed in brief below.

Fiscal Discipline: The foremost was the issue of Fiscal discipline. Besides meeting the current fiscal target of 4.1, the FM has set a target of 3.9 for 2015-2016. Also the FM has set a medium term target of 3.

 

 


GROWTH ORIENTED BUDGET; NIFTY HANGS IN BALANCE - 28/02/2015.

NO FREEBIES FOR AAM AADMI.

Besides being the most awaited Budget of recent times, it was also the first full budget of the Modi government. The FM had a tough job at hand as the expectations had reached the sky. Mr. Arun Jaitley delivered a Budget, which was not only big on ideas but also attempted to cover and address various tricky areas which have been discussed in brief below.

Fiscal Discipline: The foremost was the issue of Fiscal discipline. Besides meeting the current fiscal target of 4.1, the FM has set a target of 3.9 for 2015-2016. Also the FM has set a medium term target of 3.

Growth: The FM was optimistic while talking about Growth when he said that the country will soon be able to achieve double digit growth. Currently the growth figures are being pegged at 8 to 8.5%.

Inflation: FM pointed out that the war against inflation has been won and inflation can be expected to remain around 5% which in turn will open room for monetary policy easing.

Taxation: On the Taxation front, the FM did away with Wealth Tax and replaced with 2% surcharge on super-rich. He also proposed to cut Corporate Tax to 25% over next four years. However the middle class had little to cheer as there was no revision in the Income tax brackets, but the Service tax was increased from 12.36% to 14%.

Other: Some key announcements involved the implementation of GST from April 2016 and deferring rollout of GAAR by 2 years.

All in all it was a good balancing act done by the FM but definitely not the ‘super’ Budget one expected from this government.

TECHNICALLY SPEAKING.

Sensex opened the week at 29316, made a high of 29560, low of 28693 and closed the week at 29361. Thus it closed the week with a gain of 130 points. At the same time the Nifty opened the week at 8856, made a high of 8941, low of 8669 and closed the week at 8901. Thus the Nifty closed the week with a gain of 68 points.

On the daily as well as weekly charts both the indices made a Spinning Top formation which is a neutral formation. On the daily charts it was with small black body whereas on the weekly charts it was with small white body. This formation can turn bearish when it gets a bearish candlestick pattern as confirmation. Thus daily as well as weekly candlestick patterns are neutral formations and a lot will depend on the direction the market adopts Monday onwards.

On the monthly chart, both the indices had formed a Last Engulfing Top which required a confirmation in the form of a black body candle in February month but it was not to be as the February month instead formed a small white body candle. Thus the pattern has not been confirmed.

Both the indices flirted with the short term average of 20dma (Sensex – 28952 and Nifty – 8750) but somehow closed the week above it. Besides this both the indices continue to remain above the medium term average of 50dma (Sensex – 28363 and Nifty – 8560) and even the long term average of 200dma (Sensex – 26789 and Nifty – 8028). Thus the trend in the short term, medium term and long term timeframe continues to remain bullish.

MACD continues with Sell signal despite being in positive territory. Price ROC is positive and continues with its Buy signal. RSI (59) suggests that bullish momentum is intact. MFI continues to move higher at 73, indicating positive money flow. Stochastic Oscillator %K (75) continues to remain above %D and hence continues in Buy mode. ADX has gone lower to 20, suggesting uptrend has lost lot of its strength. Directional Indicators continue in Buy mode as +DI remains above –DI. OBV continues in Buy mode making higher top higher bottom formation. Thus majority of Oscillators are suggesting a bullish bias in the near term. 

Option data suggest highest Call Open Interest buildup still remains at the strike of 9000, whereas the highest Put build-up has shifted to the strike of 8500. Thus Option data suggests a trading range with support coming in at 8500 and resistance around 9000. Friday saw strong build-up for 9200 Call which indicates that the level of 9200 might act as strong resistance.

Trendline Resistance for the Sensex is at 30287. Trendline Support is at 27903.

Trendline Resistance for the Nifty is at 9130. Trendline Support falls at 8410.

INDEX LEVELS:

S3

S2

S1

CLOSE

R1

R2

R3

Nifty

8565

8669

8794

8901

8996

9100

9215

Sensex

28355

28693

29060

29361

29786

30076

30443

LAST WEEKS RECOMMENDATIONS:

STOCK

Reco. Price

Tgt

Reached

Lot Size

Profit

Buy ConCor

1576

1657

1650

250

Rs.18,500

HondaPwr

1083

1131

1139

250

Rs.14,000

HindZinc

181

189

183

2000

Rs. 4,000

SesaSter

217

225

225

1000

Rs. 8,000

Buy Nelco

92

100

100

4000

Rs.32,000

Total

Rs.76,500.

THIS WEEKS RECOMMENDATIONS:

STOCK

CMP

SL

Tgt-1

Tgt-2

Buy Maruti

3620

3532

3758

3897

Buy HPCL

620

605

644

669

Buy NTPC

155

151

162

169

Buy DishTV

85

82

90

95

Buy MuthootFin

238

233

246

255

WATCH OUT FOR:

NTPC Falling Channel

DishTV

Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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