WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

SPOT NIFTY : The In­dian stock mar­ket, af­ter gain­ing for three con­sec­u­tive weeks, has sapped its three-week win­ning streak as Nifty has lost 1.50 per cent in the cur­rent week. The mar­ket had a de­cent out­ing in the first trad­ing ses­sion of the week and it man­aged to close just above its 200-D SMA. How­ever, it failed to build on the gains as global cues played spoil­sport and, as a re­sult, profit-book­ing was seen in the do­mes­tic mar­kets. On the Wall Street, tech­nol­ogy stocks were hit hard and, as a re­sult, Nifty IT plunged about 4.40 per cent dur­ing the week.

The Nifty, af­ter wit­ness­ing break­out of the two week’s consolidation range of 10,440-10,650, ex­tended its up­move to­wards the level of 10,774, and pretty much on the ex­pected line, faced re­sis­tance around the cru­cial 200-D SMA and near to the lower end of the bear­ish gap which was seen on Oc­to­ber 4, 2018. Af­ter en­coun­ter­ing re­sis­tance at the 200-D SMA, Nifty de­clined for the third con­sec­u­tive day. Go­ing ahead, the 200-D SMA is likely to con­tinue to pose threat to any up­move that Nifty will at­tempt. On the down­side, the zone of 10,440-10,480 is a cru­cial sup­port zone, as man­i­fold sup­ports are po­si­tioned in this re­gion. To be­gin with, the 200-D SMA is placed at 10,482, fol­lowed by the 38.2 per cent re­trace­ment level of the re­cent up­move, which be­ing from Oc­to­ber's low and the re­cent swing low of 10,440 which was seen on Novem­ber 13, 2018. All things con­sid­ered, we rec­om­mended adopt­ing highly cau­tious ap­proach as Nifty is very close to its down­side sup­port zone of 10,440-10,480 and a de­ci­sive breach be­low this level would be a de­light for bears as it may open up for cor­rec­tion up to the level of 10,200 in the medium term. On the flip side, a fresh up­move is likely to oc­cur af­ter the Nifty moves past its im­por­tant 200-DSMA. NIFTY DE­RIV­A­TIVES: The In­dian Volatil­ity In­dex (VIX), a gauge for mar­ket’s short term ex­pec­ta­tion of volatil­ity, de­creased 1.28 per cent to 19.31. Nifty Novem­ber 2018 fu­ture last price stood at 10518 at a dis­count of 8.75 points over the spot clos­ing of 10,526.75. Nifty De­cem­ber 2018 fu­ture last price stood at 10,555.60 at a pre­mium of 28.85 point over the spot clos­ing of 10,526.75. The Nifty Put-Call Ra­tio (PCR) Open In­ter­est­wise stood at 1.27 for the Novem­ber month con­tract.

NIFTY

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