WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

SPOT NIFTY : The key In­dian bench­marks sus­tained an up­surge, but with cau­tious steps ahead of the US-China meet on trade war ne­go­ti­a­tions. Even the re­cently held Fed­eral Re­serve meet­ing sig­nalled rate hike in the near term to counter the eco­nomic boom, with the in­fla­tion rate ex­pected to rise per­sis­tently above the 2% tar­get. The global cur­ren­cies, in­clud­ing the ru­pee, had mostly wit­nessed de­pre­ci­a­tion ahead of the talks and Fed’s sig­nals. Even on the com­modi­ties front, the trade war con­cerns dragged down the global cop­per price, thereby pres­suris­ing me­tal and min­ing stocks. This time around, the broader mar­ket indices were a mixed bag with the Mid-cap in­dex out­per­form­ing the key bench­marks, while the Small-cap un­der­per­formed. Nev­er­the­less, all indices gained more than 1 per cent. On the sec­toral front, FMCG and Power sec­tors led the pack, gain­ing more than 3 per cent each. All other sec­tors ended in the green too, but Bankex and Realty re­mained sub­dued with marginal gains. Tech­ni­cally, In­dian bench­mark in­dex Nifty gave a con­sol­i­da­tion break­out at the higher level of 11495 and has sus­tained above this level on a weekly clos­ing ba­sis, reg­is­ter­ing prob­a­bly the fifth con­sec­u­tive weekly uptick for the Nifty. On the daily time frame, Nifty gave a gap-up open­ing on Au­gust 23, but be­ing an open-high at 11620.70, it wit­nessed in­tra-day cor­rec­tion. Hence, go­ing for­ward, if 11670 is bro­ken on the up­side, we hold 11750-11775 as the next re­sis­tance, fol­lowed by 12000 as the medium-term re­sis­tance. How­ever, an up­side move­ment with baby steps and os­cil­la­tors in the over­bought zone can cue some cor­rec­tion. Hence, if Nifty falls be­low 11550, 1148011440 will act as sup­ports, fol­lowed by 11340, which will act as pro­vi­sional trend re­ver­sal.

NIFTY DE­RIV­A­TIVES: The In­dian Volatil­ity In­dex (VIX), a gauge for mar­ket’s short term ex­pec­ta­tion of volatil­ity, dipped 1.16 per cent to 12.75. Nifty Au­gust 2018 fu­ture last price stood at 11,596 at a pre­mium of 13.25 points over the spot clos­ing of 11,582.75. Nifty September 2018 fu­ture last price stood at 11,635.95 at a pre­mium of 53.25 point over the spot clos­ing of 11,582.70. The Nifty Put-Call Ra­tio (PCR) Open In­ter­est-wise stood at 1.61 for Au­gust month con­tract. Among Nifty Calls, 11,600 Strike Price from the Au­gust month ex­piry was the most ac­tive Call. Among Nifty Puts, 11,500 Strike Price from the Au­gust month ex­piry was the most ac­tive Put. For the Au­gust se­ries, the max­i­mum OI out­stand­ing for Puts was at 11,500 strike price and that for Calls, it was at 11,600 strike price.

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