Previous Week : BSE Sensex closed at 18,938.46 up by 175.72 points, while the NSE Nifty closed at 5746.95
Indian equities continued to inch northwards extending gains for fifth consecutive week, a steadily appreciating rupee against the US dollar and firm global cues continued to fuel the momentum. Nifty steadily moved up in the first three days of the truncated trading week and scaled past the 5800 mark for the first time since April 2011. It witnessed some profit booking on the last trading day of the week to give up some of its weekly gain.
  • The 30 share BSE Sensex closed at 18,938.46 up by 175.72 points or 0.9%, while the NSE Nifty closed at 5746.95, up by 43.65 points or 0.8%, week on week basis
  • BHEL, Ambuja cement, Reliance Industries, State bank of India, L&T, JP Associates and Hindustan Unilever were the major gainers in the index where as Cipla, Lupin, Bajaj Auto HDFC and Hero Motocorp were the key draggers amongst Nifty constituents
  • The Union cabinet on Thursday relaxed foreign investment rules for insurers and pension fund managers, cleared the new Companies bill and approved a legislation to deepen commodities trading to help farmers hedge their risks and a proposal to let the Competition commission vet all corporate mergers and acquisitions to prevent companies from controlling market mechanics
  • Brent crude closed at $112.58/barrel gaining 0.16% on a weekly basis (as on Thursday)

Week Ahead : FIIs were net buyers to the tune of 1754 crore while DIIs were net sellers to the tune of 1961 crore
The Nifty on the weekly chart has formed a small bodied bull candle suggesting indecision at higher level. The intermediate uptrend can take a breather after the rapid advance over the last few weeks.The overbought conditions on short-term momentum oscillators also suggests towards some profit booking in the coming week.
  • Nifty on the short term has immediate support at 5630 which is the immediate swing low a breach of the above support level will see the index testing major short term support at 5500-5460 area being the lower band of the recent rising gap of September 14, 2012 and 50% retracement of current up move (5215-5815) placed around 5510
  • Bulls will remain in control as long as this support is held on a closing basis
  • On the higher side nifty has immediate resistance at 5815 which is the previous week high a sustained closing above the resistance level will see the index testing 5950 which may act as a crucial hurdle for the current up move being the 78.6% retracement of the entire decline from November 2010 high 6338 to December 2011 low of 4531. Therefore, it would be prudent to book profits on such rallies and wait for some cool-off in the short-term.
  • In the month of October (till October 4, 2012), FIIs were net buyers to the tune of 1754 crore while DIIs were net sellers to the tune of 1961 crore
  • Key data/events to watch globally would be Initial jobless claims, wholesale inventories and MBA mortgage applications. In India, key data to watch out would be IIP no for the month of August.