WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

SPOT NIFTY : The bulls had wit­nessed a sharp pull­back rally on Mon­day; how­ever, the bench­mark in­dices failed to get a fol­low-through move on the up­side and they con­tin­ued to move south­wards on Wed­nes­day and Thurs­day, break­ing their im­por­tant psy­cho­log­i­cal mark as the ghost of the strong dol­lar, Brent crude oil price rise and the weak monthly auto sales num­bers spooked the In­dian mar­kets. The bench­mark in­dices have plum­meted more than 3 per cent dur­ing the week, and in line with the front­line in­dices, sell­ing was seen in the broader mar­kets as well with Nifty Mid-cap los­ing about 2.75 per cent, while the Nifty Small-cap dip­ping about 1.93 per cent. The sell­ing pres­sure was seen across the sec­tors, barring Nifty Me­tal. The cor­rec­tion was led by Nifty Auto, Nifty Pharma and Nifty FMCG. Tech­ni­cally, af­ter test­ing the sup­port level of 10,775-10,850 mul­ti­ple num­ber of times in a span of last 7 to 8 trad­ing ses­sions, the in­dex fi­nally breached its cru­cial sup­port zone on Thurs­day and moved be­low its 200-DMA for the first time af­ter May, 2018. Go­ing ahead, the lev­els of 10,530-10,550 is likely to act as a sup­port level for the in­dex and a fol­low-through move be­low this level may take the in­dex to­wards lev­els of 10,400-10,310 in the short term. On the higher side, we be­lieve that the lev­els of 10,775-10,850 is likely to act as a stiff re­sis­tance for the in­dex. If we speak of the short-medium term, the trend is cer­tainly in favour of the bears. How­ever, we feel that the cur­rent weak­ness is now over­done and we might see a pull­back rally, which could be re­sisted at the lev­els of 10,775-10,850.

NIFTY DE­RIV­A­TIVES: The In­dian Volatil­ity In­dex (VIX), a gauge for mar­ket’s short term ex­pec­ta­tion of volatil­ity, jumped about a 4.36 per cent to 18.91. Nifty Oc­to­ber 2018 fu­ture last price stood at 10,599.90 at a pre­mium of 0.65 points over the spot clos­ing of 10,599.25. Nifty Novem­ber 2018 fu­ture last price stood at 10,650.95 at a pre­mium of 51.7 point over the spot clos­ing of 10,599.25. The Nifty Put-Call Ra­tio (PCR) Open In­ter­est-wise stood at 1.01 for the Oc­to­ber month con­tract. Among Nifty Calls, 11,000 strike price from the Oc­to­ber month ex­piry was the most ac­tive Call. Among Nifty Puts, 10,500 strike price from the Oc­to­ber month ex­piry was the most ac­tive Put. For the Oc­to­ber se­ries, the max­i­mum OI out­stand­ing for Puts was at 10,500 strike price, and that for Calls, it was at 11,000 strike price.

NIFTY

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