WEEKLY OUTLOOK: 16MAR TO 20MAR 2009

FUNDAMENTALLY
The focus would be on U.S. Fed's interest rate decision next Wednesday where, the arsenal has in fact, run out of ammunition completely. So, it could be just a non event for that matter unless the rates are hiked, which is highly unlikely. But there is also a host of economic data lined up for next week, as usual. Market players should focus more on this data rather than those pep up talks by the governments from time to time. Things would remain under pressure until the unemployment rates start cooling off and consumer sentiment returns and people start spending.

The run up to next G20 meeting early next month(2nd April) would also attract attention though, the outcome, howsoever positive may not have any short term impact on the markets. But a negative outcome could certainly add heavily to the already dampened spirits! Watch out!
The focus seems to be shifting from the U.S. and more towards the European continent where there is much more to be revealed than visible economically.



WEEKEND READING
1. Sentiment in Gold, Stock and Commodity market
2. Treasury soon to offer details on toxic assets plan

Offer by the U.S. treasury to come out with details on toxic assets plan could evoke more positive response if the plan is transparent and unambiguous. It would be worth tracking this development next week.


GOLD($929.4)
Some strength in dollar has hindered the uptrend in this precious metal. Negative divergence in weekly and daily Momentum Indicators(MIs) does not bode well for gold in near to medium term. A breach of its 50dma in 900 area would be a cue to exit for short term traders. A sideways move is anticipated in the days ahead. However, its 200dma in 850 area should lend strong support in the days ahead. But medium term traders may exit below this mark.

SILVER ($13.18)
It has been holding well above its support 50dma at 12.5 and has even closed above its 200dma at 13.07. But strength in dollar could keep it in sideways mode over the next few days. Holding above 12.48 continuously over the next couple of weeks would a bullish sign. But short term traders may exit on a close below this mark and medium term traders below 11.56.



TECHNICALLY MARKETS
The downtrend has been wakened a little due to short covering all around. Some small scale buying for long term also could have taken place over the last few days. But it would be naive to think that buying interest has returned. Yet, some easing of the tense situation is surely apparent among the bulls. There are still multiple resistances ahead to be surpassed before that. Rather, it would be prudent to initiate fresh shorts near immediate resistances(with strict stop loss) for small gains as markets could remain sideways, if not trend lower below their recent lows soon. But there is no sign of forming a bottom so far even if there is a 20% rally from the current levels... because it is a primary bear market!

U.S. DOW (7224)
Dow closed above our upper boundary at 7200 mentioned last week. It is a signal of weakening downtrend in the short term. A sideways trend with some positive bias is anticipated in the near term.
Resistances above here are at 7470 and then 7780. Its 50dma is also in 7800 area. So, in the given situation it would be realistic to expect that this current up move would have maximum target around 7800 level. But a close above this level would cause more short covering and strengthening the uptrend.
On the other hand a failure to move above 7470 would be a cue to initiate fresh shorts. Supports are at 6856 and 6765. Breach of second support would threaten its recent low of 6470.

U.K. FTSE100 (3754)
Made a failed attempt to surpass 3800 level. Chart patterns do not suggest any firm conviction to surge ahead robustly. A sideways trend is envisaged in this index with some negative leanings next weak. Its crucial resistance is in the 4060 area. But a failure to close above 3925 would be a cue initiate fresh shorts. Supports are at 3638 and 3597. A close below this second support would threaten its recent low at 3461.

JAPAN NIKKEI (7569)
Respected its crucial support at 7000 and rebounded last week. A close above 7600 would help arrest the downtrend in short term. However, if fails to move above 7900 this week then it would be a signal of impending weakness. A close only above 8258 would mitigate the negative outlook in this index.
A sideways trend between 8200 and 7000 is anticipated next week. Breach on either side would determine the further trend.

CHINA SHANGHAI (2129)
Although, the uptrend seem to be loosing steam in this index, its holding above 2037 all these days could also turn out to be a bullish move in the making. 2035 and 1945 remain its crucial supports. On the other hand, a move above 2265 would be a bullish signal. Outlook is neutral to negative for the week ahead.

HONGKONG HANGSENG (12526)
A close above 13040 would signal some relief in the short term. But a close above 14086 is needed to mitigate the negative outlook in this index. A sideways trend is envisaged between 11000 and 13600 over the next few days.

INDIA BSE SENSEX (8757)
Similar to FTSE100, this index also does not suggest any firm conviction to move above its resistances nearby. At the same time it has been closing above 8500 most of the time during declines. The favoured view is that this index is a sell on rise near 9100 to 9200. In other words, it could also remain sideways between 9200 and 8000 over the next few days. Supports are at 8350 and 8047.

INDIA NIFTY (2719)
Here also the resistance at 2800 levels could be used to initiate fresh shorts with appropriate stop loss. But a close above 2805 could take it to 3000 levels in the short term. But the favoured view here also is a sideways trend over the next few days. Supports would be 2500 and 2250.