WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

SPOT NIFTY : Af­ter wit­ness­ing cor­rec­tion last week, the stock mar­kets made no­table progress dur­ing the cur­rent week and have gained about 3.32 per cent. Nifty be­gan the week with a strong rally and ex­tended its up­move for the fourth day in a row, sur­pass­ing its im­por­tant mov­ing av­er­age, i.e. 200-day mov­ing av­er­age with a gap-up. The do­mes­tic mar­kets got a ma­jor lift from the dovish com­ments on in­ter­est rates by the Fed­eral Re­serve Chair­man Jerome Pow­ell. Look­ing ahead, a large num­ber of events are likely to un­fold in the com­ing days like the much-awaited meet­ing be­tween US Pres­i­dent Don­ald Trump and his Chi­nese coun­ter­part, Xi Jin­ping and, on the do­mes­tic front, GDP for the Septem­ber quar­ter will be an­nounced, au­to­mo­biles com­pa­nies will de­clare their monthly sales data and RBI will hold its pol­icy re­view meet­ing.

The Nifty, af­ter tak­ing sup­port around its 38.2 per cent re­trace­ment level and the 20-day mov­ing av­er­age, re­sumed its up­trend, reg­is­ter­ing fourth con­sec­u­tive gains in a row. Nifty sur­passed its cru­cial 200-day mov­ing av­er­age with a gap-up open­ing and ex­tended its up­move to fill the bear­ish gap cre­ated on Oc­to­ber 4. Go­ing ahead, Nifty is likely to move to­wards the lev­els of 10,980 and 11,090, as this level is 61.8 per cent re­trace­ment level of en­tire cor­rec­tive phase which be­gan in Au­gust 2018. On the down­side, the up­side gap which has been cre­ated on Novem­ber 29 is likely to of­fer good sup­port in the short term. Over­all, the struc­ture looks pos­i­tive as the in­dex clawed above its im­por­tant 200-day mov­ing av­er­age and as long as Nifty holds above 10,710-10,770, the strat­egy of buy­ing on dips should be adopted. NIFTY DE­RIV­A­TIVES: The In­dian Volatil­ity In­dex (VIX), a gauge for mar­ket’s short term ex­pec­ta­tion of volatil­ity, surged by 4.06 per cent to end at 18.69. Nifty De­cem­ber 2018 fu­ture last price stood at 10908.95 at a pre­mium of 50.25 points over the spot clos­ing of 10,858.70. Nifty Jan­uary 2019 fu­ture last price stood at 10,949.10 at a pre­mium of 90.40 point over the spot clos­ing of 10,858.70. The Nifty Put-Call Ra­tio (PCR) Open In­ter­est-wise stood at 1.32 for the De­cem­ber month con­tract. Among Nifty calls, 11,000 strike price from the De­cem­ber month ex­piry was the most ac­tive Call. Among Nifty Puts, 10,700 strike price for the De­cem­ber month ex­piry was the most ac­tive Put. For the De­cem­ber 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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