WHAT LIES AHEAD : NEAR-TERM PIC­TURE

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SPOT NIFTY : In­dian stock mar­kets wit­nessed a scin­til­lat­ing rally last week and kicked off the cur­rent week on a pos­i­tive note as the out­come of the G20 sum­mit lifted the mar­ket sen­ti­ments. How­ever, the mar­kets pared most of the gains to end flat. It seemed like a rou­tine profit-book­ing af­ter a sharp up­side rally, how­ever, the scary pic­ture of the global peers, es­pe­cially the US mar­kets took the mar­ket across the globe by sur­prise as it wit­nessed a harsh fall on Tues­day as fears about a weaker econ­omy came to the fore, as the yield curve pre­sented an in­verted pic­ture af­ter a long time. An in­verted yield curve rep­re­sents a pref­er­ence for the shorter term debt due to un­cer­tainty sur­round­ing in the longer end of the curve. This had a rub-off ef­fect on all other global peers and the In­dian mar­kets too re­mained un­der pres­sure and failed to take any sense of re­lief with Re­serve Bank of In­dia’s (RBI) pol­icy de­ci­sion to keep the repo rate un­changed. The weak­ness per­sisted in the Thurs­day’s ses­sion as well and the Nifty has lost al­most 2.60 per cent dur­ing the week. Af­ter start­ing its up­ward rally from the lower level of 10,490, Nifty reg­is­tered a high of 10,941 and was seen re­sist­ing its im­por­tant 100-day mov­ing av­er­age. Af­ter re­sist­ing around the the mov­ing av­er­age, Nifty wit­nessed cor­rec­tion and dur­ing this cor­rec­tion phase Nifty filled the gap of Novem­ber 29 and slipped be­low its cru­cial mov­ing av­er­age, i.e. 200-day mov­ing av­er­age and also its 21-day mov­ing av­er­age. On Thurs­day, Nifty not only opened with a gap-down, but the bears did get mo­men­tum on the down­side af­ter a gap-down start and ended the day near the low­est level of the day. Go­ing ahead, the level of 10,44010,480 is a cru­cial sup­port for the Nifty, while on the up­side, any up­move is likely to be re­sisted around the zone of 10,74810,723 as this is the gap area cre­ated on De­cem­ber 6 and also

the 200-day mov­ing av­er­age is placed near this re­gion. NIFTY DE­RIV­A­TIVES: The In­dian Volatil­ity In­dex (VIX), a gauge for mar­ket’s short term ex­pec­ta­tion of volatil­ity, jumped by 4.95 per cent to end at 19.30. Nifty De­cem­ber 2018 fu­ture last price stood at 10619.80 at a pre­mium of 18.65 points over the spot clos­ing of 10601.15. Nifty Jan­uary 2019 fu­ture last price stood at 10666 at a pre­mium of 64.85 point over the spot clos­ing of 10,601.15. The Nifty Put-Call Ra­tio (PCR) Open In­ter­est-wise stood at 1.08 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, 10,500 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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