WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

SPOT NIFTY : In­dian stock mar­ket bulls some­how man­aged to out­pace the bears on a weekly ba­sis, but wit­nessed ex­treme moves on the daily time frame. Op­ti­mism in the US mar­kets and a good start to the do­mes­tic earn­ings sea­son pulled the mar­kets up, but the pre­vail­ing trade ten­sions and crude oil price rise tried drag­ging the mar­kets down. Fur­ther, the fear ahead of the prob­a­ble rate hikes in De­cem­ber have kept the in­vestors on their toes.

The bench­mark in­dices out­per­formed the Mid-cap index which gained 1.9%, while they un­der­per­formed the Small-cap index, which surged 3.4%. Al­most all sec­toral in­dices ended in the green, with FMCG and Power on the fore­front of the move with gains of 4.3% and 3%, re­spec­tively.

Our bench­mark index Nifty bounced back from its re­cent low of 10138 level and surged near to its 38.2% re­trace­ment level, but re­treated. Thereby, last week might have acted as a breather af­ter 5 con­sec­u­tive weekly falls. The bounce-back on the daily time frame was not sup­ported by vol­umes. Nifty turned back from be­low its 200-day EMA level of 10752. Nifty has formed a bear­ish en­gulf­ing pat­tern on the daily time frame, and hence, if the re­treat con­tin­ues, we hold 10355-10320 as the im­me­di­ate sup­ports, pro­vided the Nifty falls be­low the 10425 level. The lev­els of 10140-10120 will act as cru­cial sup­port ar­eas. On the other hand, if Nifty con­tin­ues to bounce, we hold 1052010575, fol­lowed by 10755, as the re­sis­tances.

NIFTY DE­RIV­A­TIVES: The In­dian Volatil­ity Index (VIX), a gauge for mar­ket’s short term ex­pec­ta­tion of volatil­ity, climbed about 3.51 per cent to 17.98. Nifty Oc­to­ber 2018 fu­ture last price stood at 10,445.95 at a dis­count of 7.10 points over spot clos­ing of 10,453.05. Nifty Novem­ber 2018 fu­ture last price stood at 10,498 at a pre­mium of 44.95 points over the spot clos­ing of 10,453.05. The Nifty Put-Call Ra­tio (PCR) Open In­ter­est-wise stood at 0.85 for Oc­to­ber month con­tract. Among Nifty calls, 10,700 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 10,000 strike price, and that for Calls, it was at 11,000 strike price.

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