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Weekly Report on the Market by Mr. Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities | ||
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Sep 19, 2014 13:52 IST
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India Synopsis: The week started with caution ahead of important Fed decision. Nifty witnessed sharp profit booking on Tuesday and broke 8000 mark to close below 7950. Weak IIP numbers weighed on index with banking stocks dragging the index. Fed reiterated its stance of data driven decision which gave some relief to market participants. US markets closed at all time highs and Indian markets cheered and regained 8100 levels. Banks, metals and energy stocks recovered. IT stocks also registered gains during the week supporting the index. Nifty gained close to 16 points during the week after witnessing worst and best. In global markets US index Dow closed at its all time high. European markets also remained under pressure but traded with a positive bias on hopes of European Stimulus. Asian indices gained as Chinese bank eased liquidity and Yen touched six year fresh low thus lifting Nikkei at 14 month high.
NIFTY – Technical Outlook Nifty was seen closing higher than the week's opening, which was seen trading weak in start of the weak on account of Fed meet and gained momemtum after the news. Technicals show some correction in NIfty in coming week. With RSI seen at 73 levels, Nifty is hovering around the over-bought zone. With trend getting more flat and downtrend could be seen. The bollinger resistance is seen at 8254, while support at 7630. The immediate support for Nifty at 5EMA level is seen at 8023.
BANK NIFTY– Technical Outlook Due to Fed concerns in the beginning of the week Bank Nifty was seen falling but later the meeting it gained 2% in the next day and closing near its open in the week. Some correction is seen in the coming sessions. Indicators show a slight downside divergence. The Bollinger resistance is seen at 16398, while support at 15248. The immediate support of 5EMA level is seen at 15941. RSI is seen at 66 levels and downward sloping is seen.
CNX IT – Outlook Index is trading at its peak and the trend is seen very strong. Each week it is making new highs. First two sessions were seen weak but later the index gained momentum and covered the losses. The index is seen taking support at 10902 levels at 5EMA level. With MACD and Stochastic showing a positive divergence, the index is seen moving upwards in coming sessions. Though some profit booking could be seen within the week. The Bollinger resistance is seen at 11360 while the support is at 9969.
Nifty Strategy for Next week:
Sell Nifty 8100 Call option (September) at Rs.56.10(CMP) , Min 1 lot Buy Nifty 8000 Call option (September) at Rs. 136.25(CMP), Min 2 lots
Details of the strategy: The above strategy mentioned is bullish in nature and is based on expectation of positive move in markets next week. Investment will consist of margin requirements. It is suggested to close the strategy as Nifty tests 8200 levels on the upside while close it at 8075 spot on the downside. For more information and tables Click Here
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