MOSt Technical Outlook- Monthly
INDEX
S&P CNX Nifty
Sensex
:
:
5,279
17,430
2
nd
July, 2012
The Corrective Wave
Nifty after opening flat, tested the low of May and rebounded to close at the
higher end of the last months trading range. The month of June ended with
a gain of 354 points, this movement has led to a formation of a Counter
Attack Line which will be in action if Index is able to sustain above the pattern
NIFTY LEVELS
resistance of 5300.
Nifty is placed in Wave 2 of Larger Wave C in the Elliot Wave Setup. This states
that the recent up-trend can prove to be a correction to the fall from 6338 to
5310
4531. The swing high of 5630 in Feb was a Golden Ratio Retracement and
continues to be a strong level of resistance for a medium term perspective.
5350 is an immediate level of resistance which should be watched closely and
only on crossing the same new long positions can be added.
Index consolidated in a narrow band of 4980-5200 before breaking out on
the upside and trailing levels for longs can be revised to 5150. A breach of the
support with confirmation of Inter-market setup can spoil the setup for
5085
Support
Resistance
:
:
5085, 4980
5310, 5650
uptrend and longs can be exited for a short term perspective. 4980 can be
taken as an ultimate support area for medium term positions.
Inter-market cues were volatile, especially with Rupee & CRB Index which has
been depreciating. Both the markets have a positive correlation with our Equity
Markets and sustenance of USDINR above 57.5 and CRB Index below $265 can
lead to an exhaustion of up-trend for Nifty.
Sector Outlook
SECTOR
NAME
CMP
(RS)
MOM
(%)
OUTLOOK
FOR THE MONTH
POTENTIAL
MOVERS & SHAKERS
Auto
Banking
Energy
FMCG
Infra
IT
Media
Metal
Pharma
3966
10340
7543
12729
2415
6144
1267
2870
5216
223
6293
6.0%
9.5%
6.6%
9.3%
10.5%
2.3%
10.0%
6.4%
3.3%
7.2%
6.0%
Negative
Neutral
Negative
Positive
Negative
Negative
Positive
Positive
Positive
Negative
Negative
Tata Motors
ICICI Bank
Cairn India
ITC, Jubilant Food
Bharti Airtel
Infosys
Dish TV
Hindalco
Ranbaxy, Biocon
Unitech
Bharti Airtel
Shubham Agarwal, CMT
Sr. Technical Analyst
Realty
Service
©
Motilal Oswal Securities Ltd., Palm Spring Centre, 2nd floor, Palm Court Complex, New Link Road, Malad (W), Mumbai - 64.

MOSt Technical Outlook- Monthly
S&P CNX NIFTY
ELLIOT WAVE SETUP
Z SCORE
2
nd
July, 2012
Nifty on the weekly chart is placed in Wave 2 of larger
Wave C. The uptrend may prove to be a correction to the
previous fall before start of the next wave which can drift
the Index lower.
FIBONACCI
Statistical Z Score came out from extreme of negative 3
and after a small correction has been moving upward. A
clearance of 1.2 on the Indicator will be a positive
development.
POINT & FIGURE
Fibonacci Resistance of the upswing is placed at 5310-5320
which is the immediate resistance. Sustenance above the
resistance level can add to the thrust of the next ultimate
resistance area of 5650.
A 45 degree trend line on the Point and Figure chart states
resistance between 5300-5350. This coincides with the
Fibonacci Retracement and adds significance to the level.
©
Motilal Oswal Securities Ltd., Palm Spring Centre, 2nd floor, Palm Court Complex, New Link Road, Malad (W), Mumbai - 64.

MOSt Technical Outlook- Monthly
CORRELATION MATRIX
CRB
USDINR
2
nd
July, 2012
Nifty has been positively correlated with the CRB Index.
The strength of the relation has been increasing which
states that cues from Global Commodities should be closely
followed. Breach of $265 on the CRB Index would be a
negative development for Indian Equities.
INDIA VIX
Dollar against Rupee has been negatively correlated with
Nifty and depreciation in Rupee beyond 57.5 will be a red
flag for Indian Equities. Resistance in Rupee can be faced
in the range of 53.5-54. A breach of 57.5 may call for a
steep depreciation up to Rs. 61/$.
MSCI WORLD
India Vix is negatively correlated with Nifty. Vix has support
in the band of 17 - 18 and rebound from the same can
be taken as first sign of exhaustion in up-trend.
CORRELATION
MATRIX
NIFTY
USD
INR
CRB
INDEX
Nifty has been witnessing increased correlation with the
MSCI World which indicates that global cues will be
in flavor.
GOLD
CRUDE
BOND
YIELD
MSCI
WORLD
MSCI ASIA
EX. JAPAN
Nifty
USDINR
CRB Index
Gold
Crude
Bond Yield
Msci World
Msci Asia ex. Japan
1.00
-0.73
0.71
0.77
0.64
0.37
0.83
0.81
-0.73
1.00
-0.96
-0.84
-0.94
-0.70
-0.91
-0.93
0.71
-0.96
1.00
0.79
0.97
0.73
0.93
0.94
0.77
-0.84
0.79
1.00
0.76
0.48
0.80
0.81
0.64
-0.94
0.97
0.76
1.00
0.73
0.91
0.93
0.37
-0.70
0.73
0.48
0.73
1.00
0.62
0.63
0.83
-0.91
0.93
0.80
0.91
0.62
1.00
0.97
0.81
-0.93
0.94
0.81
0.93
0.63
0.97
1.00
©
Motilal Oswal Securities Ltd., Palm Spring Centre, 2nd floor, Palm Court Complex, New Link Road, Malad (W), Mumbai - 64.

MOSt Technical Outlook- Monthly
SECTORS RELATIVE STRENGTH
BANK
AUTO
2
nd
July, 2012
Banks relative with Nifty has been consolidating in a narrow
band and continues to be a market performer with a short
term perspective.
IT
Relative strength of Auto with nifty has been falling steep
and can continue to drift lower.
METAL
IT stocks has been sustaining well at the higher end of
the short term range but Relative Strength is at a trend
line resistance which means that the sector can witness
supply on pullbacks.
Relative strength of Metals has been consistently falling
down and is now quoting at the support level. Trading
bets on temporary declines can be implemented on the
long side.
©
Motilal Oswal Securities Ltd., Palm Spring Centre, 2nd floor, Palm Court Complex, New Link Road, Malad (W), Mumbai - 64.

MOSt Technical Outlook- Monthly
SECTOR ROTATION
Improving
2
nd
July, 2012
Leading
Lagging
Weakening
3
FMCG has been leading the rally with Pharma and Banks
3
Small Caps, Media and Metals has signs of reversal from downtrend
3
Auto is the only sector which has been weakening
3
Infra, Realty, Energy, Services, Mid-cap and IT continues to trend down
Analyzing Rotation
Rotation chart is created by calculating the relative strength of sectors in comparison with Nifty as a base. A ranking
is calculated for all sectors and accordingly is placed on the chart. In a trending market the rotation is expected to be
clock- wise but oscillating market can have scenarios of vague movements.
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Motilal Oswal Securities Ltd., Palm Spring Centre, 2nd floor, Palm Court Complex, New Link Road, Malad (W), Mumbai - 64.