CNX Weekly Techno-Derivatives

CNX Nifty (CMP 7913):

Buying support at lower levels along with short covering and partial de-escalation of the Iraq as well as Russian-Ukrainian has led the Indices to close approximately 2% positive at highest record closing levels.

With 7900 CE having OI build-up of 50 Lakhs each & 8000 CE having an OI 90 Lakhs & along with 7700-7800 Put having an OI of 70 lakhs each with 7900 Put also having OI of 47 Lakhs, 7820-7850 is a key support for the next few sessions & 7990-8010 is key resistance going forward.

Expect Nifty to find support around 7820-7850 & till this support zone holds, can further move upto 7980-8010 once again.

However, a lot of resistance would be witnessed at higher levels.

Above 8010, the move could gather further momentum upto 8098-8120.

If Index breaks & sustains below 7820, would lead a retest of support zone around 7740-7705 zone. 

Weekly Range could be 7820-8010.  

Technically, Key Oscillators RSI, Stochastic & MACD are placed above their respective averages on the Daily Charts, However placed below their respective averages on Weekly charts.

BANKNIFTY (CMP 15790):

Bankex which was oversold on daily charts have rebounded to the tune of 5-6% .  

Hence Going Forward, till 15,550 holds, expect the index to continue its medium term uptrend upto 16,400.

Below 15,550 zone, support zone of 15,150-14,900 would be retested.   

Please note some observations on the Pre Roll Trends from AUG. to SEPT. series 2014

INDEX OPTIONS in SEPT. Series

               

8000 and 8200 CE OI highest across all options i.e. 18.9 and 19 lakh Shares OI (addition of 1.8 and 2.08 lakh shares on Friday) with 7800 PE and 7900 PE OI at 13.26 and 13.27 lakh share (addition of 3.54 and 1.63 lakh shares on Friday).

Implying NIFTY trying to form a base of 7650-7730 any on upside will find resistance at 8100-8160 levels.

1). Rolls on indices, NIFTY 19% (in line with avg. 20%, with cost 0.43 Vs. 0.40), Rolls BANKNIFTY 15% above Avg.  12.5% (with roll cost at 0.53 Vs. 0.45), CNXIT 8% Vs. 11% (lower than 6 month with roll cost 0.19 Vs. 0.32); BANKNIFTY may outperform NIFTY.

                                                                            

2). STOCK futures below avg. rolls at 13% Vs. 16% with Avg. Cost of rolls at 0.39 ( shade lower M-O-M 0.43, in line with  6mth avg. 0.39) clearly reflecting market participants have rolled longs or covered shorts, Individual Stocks picking crucial.

Going forward,

Movement of the Markets would be dictated by FII Fund Flows, Global Market Trends, news-flow pertaining to the geopolitical crisis arising in Ukraine & Iraq, progress of Monsoon which has improved significantly, movement of Rupee against the Dollar & crude oil price movement.

USDINR (CMP 60.46):

USDINR has retested support zone of 60.40 on relentless FII Inflows & due to partial de-escalation of Global tensions.

Now Going Forward, Till Rupee holds 60 zone, would once again move upto 61.50-61.80 zone.

BRENT CRUDE ($ 102.50)

Crude Prices have started to cool off after around 102-103$ after hitting a 9-10 month high of 113-114$ few weeks back.

Till 106$ is not crossed, expect support levels of 99-100$ to be retested.

Midcap: (CMP 11202)

NSE Mid-cap CMP 11,202 took support @ 10,750 zone & witnessed a sharp upmove upto 11,200 zone.. 

Till 10950 is held, expect Index to move upto 11,600 zone.

Below 10,950, expect the index to retest support zone of 10600-10450.

Small Cap (CMP 10,298):

BSE Mid-Cap took support @ 9850 zone & witnessed a sharp upmove upto 10,300 zone.

Till 10000 is held, expect Index to move upto 10,700 zone.

Below 10,000, expect the index to retest support zone of 9700-9650.

VIX (13.62):

VIX has been steadily trading in a range between 11 to 17 in the previous 4-5 weeks.

Above 16, it would directly spike upto 21-24 zone.

On the derivatives front,

• FII’s for the past week have stayed net buyers in the cash as well as derivatives markets while DII’s have turned Net sellers for the week gone by.

• On a Weekly basis In Index Futures FIIs were Net Buyers to the tune of ` 1235 Cr with an open interest increase of around `1155 Cr which indicates Long Build Up in Index Futures by FIIs.

• Nifty Futures have closed at a 23 points premium compared to 12 points premium a week earlier.

Cumulative Weekly FII Derivatives Stats from 18/08/2014 to 22/08/2014:

Index Futures: +1237 Cr;

Index Options: +4446 Cr;

Stock Futures: +2658 Cr;

Stock Options: -254 Cr

Cash Market:

FII: +1999 Cr;

DII: -374 Cr.

Cumulative FII Derivatives Stats from 01/08/2014 to 22/08/2014:

Index Futures: -405 Cr;

Index Options: +11734 Cr;

Stock Futures: +5371 Cr;

Stock Options: -327 Cr

Cash Market:

FII: +2746 Cr;

DII: +1406 Cr.

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Make Your Fortune With This 3 Stocks/Scripts 1.Bank Nifty 2.LT 3.AxisBank

Make Your Fortune With This Stocks/Scripts

3. Axisbank

We Have Seen This Stock Just Few Days Back Has Spit From Face Value 10 To 2.

After Split This Stock Has Given Correction Of Around 37 Points I.E. Around 7.5% From Swing High To Low.

Another Underperformed Script With Interesting Fundamental's

Looking At Chart We Can Say That 393 Is The Base For This Stock.
402 Could Be Level To Watch Above This We May See 409-411& Then All Time High Too.

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2. L&T

Another Good Script With Interesting Fundamentals, We Have This Stock In Very Much Unperformed Compared To Index.

We Believe That This Stock Is Capable To Give 5-10% Return In Short Term.

Strong Support Has Seen @ 1512-1510

Up Side Resistance Has Seen @ 1543 If Close And Sustain Then Get Ready For 1577-1631

Holding Duration Can Be 5-10 Days ( Or More )

Make Your Fortune With This Stocks/Scripts

1.Bank Nifty

This index is coming all the way from 14,400.
where other index making all time high this index seems struggling but since few days we have seem spark and hoping up-move will continue.

Support zone= 15,465 - 15,427
upside it can blast when cross & close above 15,621 - 15,633

logical target upside can be 15,980-16,120

Holding Duration can be 5-10 Days
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NeoWave Analysis Weekly wave chart Date : 16th August, 2014

Conclusions:

1. A Diametric is anticipated from the end of wave circled d, currently wave (F) of 
anticipated Diametric may be near its end. The breach above resistance area of 7840-
7850 will confirm the completion of wave (F).

2. The pattern inside wave (F) seems to be “Double three combinations”; which is clearer
on daily wave chart. The “Double three combinations” pattern ending above its starting 
point is a very bullish pattern and gives the target of 8500-8550 area.

3. Kindly note, though the “Double three combinations” in wave (F) makes a bullish case 
for Nifty cash, but the wave (F) is a part of Diametric where the power transfer from each 
leg to next is prone to failure. Hence, probability of index reaching target area may vary.

4. In case, if Nifty cash falls below 7540 (before crossing above 7840), then the expected up 
move will get negated.


NeoWave Analysis Daily wave chart 

Conclusions:

1. The Nifty cash may be unfolding Diametric (see weekly analysis) and currently may be
in wave (F) which may be near its completion. Inside wave (F), a “Double Three 
Combinations” pattern is suspected. 

2. The second corrective of suspected “Double Three Combinations” may be Contracting 
Triangle and currently wave (d) of such Contracting Triangle may be progressing. The 
wave (d) is expected to conclude below 7840.

3. The wave (e) may fall till 7670-7630 area but there is no compulsion for it to do so and 
may conclude above 7670 also.

4. The completion of wave (e) will also complete the whole “Double Three Combinations”
pattern and may start the upward wave (G)

5. The wave (G) is expected to reach till minimum of 8220 and may reach up till 8500-8550 
area.

6. In case, if 7540 is breached then the expected up move will get negated.

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CNX Weekly Techno-Derivatives

CNX Nifty (CMP 7791):

Despite weak macro-economic numbers with lower IIP data & higher Inflationary numbers, Buying support at lower levels along with short covering and partial de-escalation of the Iraq as well as Russian-Ukrainian has led the Indices to close approximately 2% positive.

With 7800-7900 CE having OI build-up of 55-47 Lakhs each & 8000 CE having an OI 73 Lakhs & along with 7600-7700 Put having an OI of 78 lakhs & 63 lakhs respectively, 7680-7710 is a key support for the next few sessions & 7890-7910 is key resistance going forward.

Expect Nifty to find support around 7680-7710 & till this support zone holds, can further move upto 7890-7910 once again.

However, a lot of resistance would be witnessed at higher levels.

Above 7910, the move could gather further momentum upto 8020-8090.

If Index breaks & sustains below 7680, would lead a retest of support zone around 7540-7475 zone. 

Weekly Range could be 7680-7910.  

Technically, Key Oscillators RSI, Stochastic & MACD are placed above their respective averages on the Daily Charts, However placed below their respective averages on Weekly charts.

BANKNIFTY (CMP 15089):

Despite Higher Inflationary numbers, Bankex which was oversold on daily charts have rebounded to the tune of 2% .  

Hence Going Forward, till 14,850 holds, expect the index to continue its medium term uptrend upto 155,400.

Below 14,850 zone, support zone of 14,450-14,300 would be retested.   

On the Derivatives Front, Index saw long build up to the tune of 5% OI addition with increase in price by nearly 2%;

CNXIT saw 12% OI addition with price nearly up by 1%.

Going forward,

Movement of the Markets would be dictated by FII Fund Flows, Global Market Trends, news-flow pertaining to the geopolitical crisis arising in Ukraine & Iraq, progress of Monsoon which has improved significantly, movement of Rupee against the Dollar & crude oil price movement.

USDINR (CMP 60.73):

USDINR has retested support zone of 60.75 on relentless FII Inflows & due to partial de-escalation of Global tensions.

Now Going Forward, Till Rupee holds 60.30 zone, would once again move upto 63 zone.

BRENT CRUDE ($ 103.40)

Crude Prices have started to cool off after around 102-103$ after hitting a 9-10 month high of 113-114$ few weeks back.

Till 106$ is not crossed, expect support levels of 99-100$ to be retested.

Midcap: (CMP 10809)

NSE Mid-cap CMP 10,809 would find support around 10650 zone with RSI showing positive divergence. 

Till 10650 is held, expect Index to move upto 11,200 zone.

Below 10,650, expect the index to retest support zone of 10300-10350.

Small Cap (CMP 9824):

Post past few months of sharp upmove, index is taking a breather & consolidation is witnessed with a negative bias while closing flatter for the week.

BSE Small-Cap Index CMP 9,824 would witness resistance at higher levels around 10100 zone. 

Till 10,100 is not crossed, expect the index to retest support zone of 9620-9570.

On a cross-over above 10,100 Index would once again resume its upmove towards 10,500-10,600.

VIX (13.22):

VIX has been steadily trading in a range between 11 to 17 in the previous 4-5 weeks.

Above 16, it would directly spike upto 21-24 zone.

On the derivatives front,

• FII’s for the past week have stayed net buyers in the cash as well as derivatives markets while DII’s too have been Net buyers for the week gone by.

• On a Weekly basis In Index Futures FIIs were Net Buyers to the tune of ` 3002 Cr with an open interest increase of around `2488 Cr which indicates Long Build Up in Index Futures by FIIs.

• Nifty Futures have closed at a 12 points premium compared to 26 points premium a week earlier.

Cumulative Weekly FII Derivatives Stats from 11/08/2014 to 14/08/2014:

Index Futures: +2876 Cr;

Index Options: +1037 Cr;

Stock Futures: +1711 Cr;

Stock Options: -310 Cr

Cash Market:

FII: +1551 Cr;

DII: +352 Cr.

Cumulative FII Derivatives Stats from 01/08/2014 to 14/08/2014:

Index Futures: -1642 Cr;

Index Options: +7288 Cr;

Stock Futures: +2713 Cr;

Stock Options: -73 Cr

Cash Market:

FII: +747 Cr;

DII: +1780 Cr.

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NeoWave Analysis of Nifty cash Date : 9th August, 2014

 Weekly wave chart

The anticipated green line given in last report is being followed by the Nifty cash. But 14th
August is an important time support and the index should break below 7420 on or before 14th
August OR ELSE, the pattern inside wave (E) becomes invalid. In that case, the following will 
become the preferred count.

In the above case (if 7420 is not breached on or before 14th August 2014), the index is expected 
to move up and may reach till 7850-7900 area on or before 31st August 2014. The important 
level to watch during next week is 7420. The 7100 levels are expected below 7420. If 7420 is 
not breached on or before 14th August 2014 then, 7850 is expected on upper side.

Daily wave chart 

Conclusions:

1. Though the Nifty cash is unfolding Diametric pattern but the clarity is very less about 
current move. At top of 7840.95, the index may have completed wave (E) or (G). The 
breach of 7420 will only confirm the completion of wave (G) at 7840.95, OR ELSE, the 
index must be in wave (F).

2. The downward pattern from 7840.95 may be Contracting Triangle OR Diametric. The 
wave (b) and (c) have consumed 5 time units each. If wave (d) also consumes 5 time
units then probability of Diametric increases. Whereas, if wave (d) consumes more/less 
than 5 time units then probably Contracting Triangle may be unfolding.

3. If the downwards move from 7840.95 turns out to be Contracting Triangle, then the index 
is in wave (F) and we can expect upward wave (G) which may move beyond 7845. 
ELSE, if the downwards move turns out to be Diametric and breaches below 7420 then 
the index has already completed wave (G) at 7840.95.

4. A sharp up move is expected till minimum of 7645 (maximum 7721 possible) which may 
take place during coming Monday and Tuesday.

5. The time consumed by expected upmove will provide further clues about the future 
action


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CNX Weekly Techno-Derivatives

Minor Correction in Overall Uptrend to pause the rally!!

Dear Friends,

Following is the Analysis on Several Indices including Nifty, Bank Nifty, All F&O Stocks, Small Cap & Mid Cap along with VIX & USDINR, Derivatives Outlook.

CNX Nifty (CMP 7568):

Significant weakening of Rupee on account of resurfacing of Geopolitical risk with President Barack Obama authorizing Air Strikes in Iraq against ISIS militants, escalation of Russian-Ukrainian crisis has prompted investors to take money off the table leading the index to close approximately 0.5% negative for the week.

With 7700-7800 CE having OI build-up of 43-49 Lakhs each & 7600 CE having an OI 30 Lakhs (10 Lakhs added on Friday) & along with 7400-7500 Put having an OI of 42 lakhs & 55 lakhs respectively, 7530-7540 is a key support for the next few sessions & 7690-7710 is key resistance going forward.

Expect Nifty to find support around 7530-7540 which is the 61.8% Fibbonacci Retracement zone of the previous upmove from 7422 (14^th July 2014) & 7840.95 (25^th July 2014) & till this support zone holds, can further move upto 7700-7710 once again. However, a lot of resistance would be witnessed at higher levels.

Above 7710, the move could gather further momentum upto 7840-7890.

If Index breaks & sustains below 7530, would lead a retest of support zone around 7460-7435 zone. 

Weekly Range could be 7530-7710.  

Technically, Key Oscillators RSI, Stochastic & MACD are placed below their respective averages on the Daily as well as on Weekly charts indicating selling pressure could emerge on rises.

BANKNIFTY (CMP 14765):

Last week, Bankex faced selling pressure on rises & closed 3% negative on a weekly basis.  

Hence Going Forward, till 15,100 does not cross, expect the index to witness a retest of support zone 14,350-14,400 zone.

However, if it crosses & sustains abv 15,100 zone, 15,460-15,500 would be witnessed.  

Going forward,

Movement of the Markets would be dictated by FII Fund Flows, Global Market Trends, news-flow pertaining to the geopolitical crisis arising in Ukraine & Iraq, progress of Monsoon which has improved significantly, movement of Rupee against the Dollar & crude oil price movement.

USDINR (CMP 61.23):

USDINR has given a breakout on account of the global currencies reeling under pressure due to escalation of Global tensions. Now Going Forward, Till Rupee holds 60.30 zone, would once again move upto 63 zone.

BRENT CRUDE ($ 106)

Crude Prices have started to cool off after around 104-106$ after hitting a 9-10 month high of 113-114$ couple of weeks back.

Till 109$ is not crossed, expect support levels of 100-101$ to be retested.

Midcap: (CMP 10644)

Post past few months of sharp upmove, index is taking a breather & consolidation is witnessed with a negative bias.

NSE Mid-cap CMP 10,644 would witness resistance at higher levels around 10,900 zone. 

Till 10,900 is not crossed, expect the index to retest support zone of 10300-10350.

On a cross-over above 10,900 Index would once again resume its upmove towards 11,400-11,600.

One can look to buy quality midcaps on any sharp declines around 10,400 zone from a medium term perspective.

Small Cap (CMP 9828):

Post past few months of sharp upmove, index is taking a breather & consolidation is witnessed with a negative bias after witnessing a decline of 0.8%.

NSE Mid-cap CMP 9,828 would witness resistance at higher levels around 10100 zone. 

Till 10,100 is not crossed, expect the index to retest support zone of 9620-9570.

On a cross-over above 10,100 Index would once again resume its upmove towards 10,500-10,600.

VIX (14.62):

VIX has been steadily trading in a range between 11 to 17 in the previous 3-4 weeks.

Above 17, it would directly spike upto 22-24 zone.

On the derivatives front,

• FII’s for the past week have stayed net buyers in the cash as well as derivatives markets while DII’s have been Net buyers for the week gone by.

• On a Weekly basis In Index Futures FIIs were Net Sellers to the tune of ` 4518 Cr with an open interest decrease of around `9221 Cr which indicates Long Unwinding in Index Futures by FIIs.

• Nifty Futures have closed at a 26 points premium compared to 15 points premium a week earlier.

Cumulative FII Derivatives Stats from 01/08/2014 to 08/08/2014:

Index Futures: -4300 Cr;

Index Options: +6251 Cr;

Stock Futures: +1002 Cr;

Stock Options: +237 Cr

Cash Market:

FII: -804 Cr;

DII: +1428 Cr.

NICKEL Outlook 07 August 2014

Technical Outlook:

On LME, Nickel prices were moving in a range bound manner since May. Today prices have
given a triangle breakout both seen on daily and weekly charts. As per the breakout levels, if
prices sustain above $19180, the next expected level is around $20500. Support level is
around $18250. At MCX, we can expect that if nickel sustains above 1178 level on a closing
basis, we can look towards upside price level of 1222, 1272. Support level is around 1121. At
present nickel price is running around 1173 level. Breach of 1178 on closing basis is
important to confirm a rally.

Outlook: The triangle breakout indicates that nickel is likely to move up from present level.
Hence we maintain a bullish outlook for nickel. As per the indicators, weekly chart is showing
prices are running above 10-period EMA, RSI slope is pointing up at 62 level.

Strategy: Buy Nickel around 1145-1150 SL 1119 Target 1222,1262.

NICKEL MCX Daily

LME NICKEL Daily

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ECB set to hold fire on rates, eyes risks from Ukraine conflict (Evening Commodity session expected to be volatile)

(Reuters) - The European Central Bank is set to hold fire on rates on Thursday as it waits for earlier stimulus measures to gain traction, while keeping an eye on emerging risks from the conflict in Ukraine.

The ECB cut interest rates to record lows in June, became the first major central bank to charge banks for holding their deposits overnight and launched a new ultra-cheap, four-year loan program, dubbed TLTROs, to be rolled out later this year."

After the fireworks in June, it is not the time to take fresh measures because the ECB wants to wait and see how things develop," said Reinhard Cluse, economist at UBS. "The ECB wants to keep its powder dry." None of the 64 economists in a Reuters polled expect any change to the refinancing or deposit rates when the Governing Council meets on Thursday.

ECB President Mario Draghi is likely to put more emphasis on the geopolitical risks to the euro zone growth outlook after the European Union stepped up sanctions against Russia for its role in Ukraine's political crisis, which has already hit confidence.

Although all but two of 36 economists in a separate poll said there was a low risk of any negative impact on the euro zone economy from the U.S. and EU sanctions on Russia, they come at a time when key countries are struggling to return to growth.Italy, the euro zone's third largest economy, slipped back into recession in the second quarter. Prime Minister Matteo Renzi has led calls to move from austerity to looser EU budget rules, but has been rebuffed by Germany, Europe's economic powerhouse, and some others.

In France, the region's second biggest economy which is also struggling, President Francois Hollande said the ECB and Germany must do more to boost growth and fight a "real deflationary risk" in Europe.

Against the backdrop of this debate, Draghi held talks with incoming European Commission chief Jean-Claude Juncker on Wednesday.

"DONE WITH EASING"

Euro zone annual inflation hit 0.4 percent in July, the lowest since October 2009, though much was down to a sharp fall in volatile energy prices. UBS sees inflation picking up slowly from here, reaching 0.8 percent toward the end of the year.

Low price pressures in the euro zone are also a result of reforms in some countries to regain competitiveness that include wage cuts and restrained government spending, which the ECB does not want to undermine.

The central bank has also taken heart from looser bank lending standards, indications of a pick-up in credit demand going forward and a weaker euro exchange rate <EUR=>, which hit a nine-month low against the dollar on Wednesday.

If, however, inflation remains stuck at low levels for too long and if inflation expectations start to deteriorate, the ECB says it stands ready to act, possibly with large-scale asset purchases, which are also known as quantitative easing.

"President Draghi is likely to reiterate the ECB's dovish stance, leaving forward guidance unchanged with the option to do more in the future (including QE)," said Frederik Ducrozet, senior economist at Credit Agricole CIB.

NeoWave analysis update on Nifty cash 05-08-2014

Conclusions:

1. The wave (G) is still not complete and the Nifty cash may be unfolding Contracting 
Triangle OR Diametric from the end of wave (F).

2. Currently, wave (c) may be in progress of above mentioned Contracting Triangle OR 
Diametric.

3. The wave (b) is a “Double Combination” pattern consisting of Zigzag and Flat. This 
pattern should be retraced minimum by 61.8% and maximum by 80%. 

4. The Nifty cash may move above 80% level (7801) since the expected higher degree
pattern is Contracting Triangle or Diametric. But in no case it should move above 7841.

5. If the anticipation of pattern inside wave (b) is correct then Nifty cash should not fall 
below 7635 level.

6. One can go long in the range of 7695-7690 with stop loss below 7635 for minimum target 
of 7760 and maximum target of 7801.


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Crude oil Technical’s August 5, 2014

Crude oil - Trading with support-resistance levels…

Crude oil prices have been trading in a broad range of 5915-6555 since last week of January - till date. Prices have again and again rebounded from around support of 5915-5935. Recently, prices had again declined close to the same support making low of 5933 and then rebounding above 6008 levels. However, price gains are likely to get capped by the downward sloping resistance line at 6155-6170.

On the technical indicators: 14-day RSI too has rebounded from above the over-sold region i.e. 30 and is currently trading above its moving average, suggesting a possible bounce back in prices.

Outlook: Crude oil prices are likely to bounce back and rally towards resistance at 6155-6170, and on break-out above the resistance line, prices can test levels of 6275 and 6410. However, on the downside support holds at 5915, below which we see prices declining towards the support line 2 at 5645.

Strategy: Buying is advised in Crude oil August futures at 5975-6010 and more can be added on dips to 5945, for Targets of 6110-6180. One can add more positions above 6181, for targets of 6275 and 6410, maintain Stop below 5915.

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NeoWave Analysis of Nifty cash Daily,Weekly,Monthly 04-08-2014

NeoWave Analysis of Nifty cash  Daily wave chart Date : 2nd August, 2014

Conclusions:

1. At the end of wave (G), a Diametric may have completed. (Kindly see weekly analysis dated 02/08/2014 for Diametric)

2. The internal pattern of wave (G) seems to be “Non-Limiting Contracting Triangle”

3. The wave (a) of the above mentioned Contracting Triangle is the largest wave among waves (a), (c) and (e). The fall after completion of pattern has already equaled the wave (a) in size (measured and shown by red rectangles on chart).

4. Since the latest pattern that completed in Nifty cash seems to be a Non-Limiting Contracting Triangle, the index is expected to rise till time zone of apex point (that is, index may give pull back till 05/08/2014 time wise). The expected rise price wise is till 7640-7665 area and in no case should cross above 7735.

5. If the above behaviour (point 4) is followed by Nifty cash then it may fall till minimum of 7400 or more with high speed, starting from 05/08/2014. In case, if 7735 is crossed on upper side, then the expected fall will get negated.

NeoWave Analysis of Nifty cash Monthly wave chart Date : 2nd August, 2014

Conclusions:

1. The Nifty cash seems to be unfolding an Expanding Triangle from the end of wave circled C.

2. Currently, the wave circled e of expected Expanding Triangle may be in progress. The wave circled e seems to be unfolding as a Diametric pattern.

3. The wave (E) of expected Diametric may be near its end or may have already completed as Contracting Triangle.

4. If the above pattern anticipation is correct then the breach below 7420 during August 2014 will confirm the completion of wave (E) and start of wave (F).

5. The breach below 7420 during August 2014 may push Nifty cash till minimum of 7150 and maximum 6850 before end of September 2014.

6. In case, if 7841 is crossed on upper side during August 2014, then the expected fall will get negated.

NeoWave Analysis of Nifty cash Weekly wave chart Date : 2nd August, 2014

Conclusions:

1. A Diametric is anticipated from the end of wave circled d, currently wave (E) of anticipated Diametric may be near its end or may have already concluded. The breach below 7420 on or before 14th August will confirm the end of wave (E) and start of (F).

2. The breach below 7420 on or before 14th August may push Nifty cash towards minimum of 7105 and maximum of 6870 before end of September 2014.

3. In case of breach above 7800, the expected fall will get negated.


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CNX Weekly Techno-Derivatives Snapshot

CNX Nifty (CMP 7602):

Significant weakening of Rupee on account of Rising Geopolitical risk, Argentinian news of default of Interest Payment & Mounting Anxiety over Ukraine along with Sharp rise in US Q2 GDP adding to the fear of an early increase in Interest rates has prompted investors to take money off the table leading the index to close approximately 2.5% negative for the week despite crude prices cooling off & a significant revival in July Monsoons.

Meanwhile 8 Core Industries grew 7.3% in June v/s 1.2% Yoy & 2.35% Mom which was the highest in 9 months is showing green shoots in the economy with previous months strong IIP numbers & a significant cooling off in Inflation as per the last reading.

Coming week, the most crucial trigger would be the RBI policy to be announced on 5^th August 2014.

With 7800-8000 CE having OI build-up of 30-49 Lakhs each & along with 7600-7500 Put having an OI of 37 lakhs & 40 lakhs respectively, 7540-7560 is a key support for the next few sessions & 7740-7760 is key resistance going forward.

Expect Nifty to find support around 7530-7560 which is the 61.8% Fibbonacci Retracement zone of the previous upmove from 7422 (14^th July 2014) & 7840.95 (25^th July 2014) & till this support zone holds, can further move upto 7730-7750 once again. However, a lot of resistance would be witnessed at higher levels.

Above 7760, the move could gather further momentum upto 7840-7890.

If Index breaks & sustains below 7530, would lead a retest of support zone around 7460-7435 zone. 

Weekly Range could be 7530-7740.  

Technically, Key Oscillators RSI & MACD are placed below their respective averages on the Daily as well as on Weekly charts indicating selling pressure could emerge on rises.

BANKNIFTY (CMP 15127):

Last week, Bankex has traded in a tight range & closed 1% negative on a weekly basis as it outperformed broader indices.  

Hence Going Forward, till 15,000 zone holds, expect the index to witness rebound upto 15,450-15,600 zone.

However, if it breaks & sustains below 15,000 zone, 14,660-14,500 would be retested.  

Going forward,

Movement of the Markets would be dictated by FII Fund Flows, Global Market Trends, ongoing India Q1FY15 Corporate results along with future earnings guidance, progress of Monsoon which has improved significantly, movement of Rupee against the Dollar & crude oil price movement.

USDINR (CMP 60.85):

USDINR has given a breakout after trading in a 1.5% band between 59.40 & 60.60 for the last 25 sessions. Now Going Forward, Till Rupee holds 60 zone, would once again move upto 62.5 zone.

BRENT CRUDE ($ 105)

Crude Prices have started to cool off after around 104-105$ after hitting a 9-10 month high of 113-114$ couple of weeks back.

Till 108$ is not crossed, expect support levels of 100-101$ to be retested.

Midcap: (CMP 10763)

Post past few months of sharp upmove, index is taking a breather & consolidation is witnessed with a negative bias.

NSE Mid-cap CMP 10,788 would witness resistance at higher levels around 11000 zone. 

Till 11,000 is not crossed, expect the index to retest support zone of 10400-10450.

On a cross-over above 11,000 Index would once again resume its upmove towards 11,400-11,600.

One can look to buy quality midcaps on any sharp declines from a medium term perspective.

Small Cap (CMP 9890):

Post past few months of sharp upmove, index is taking a breather & consolidation is witnessed with a negative bias after witnessing a decline of 1.5%.

NSE Mid-cap CMP 10,037 would witness resistance at higher levels around 10300 zone. 

Till 10,100 is not crossed, expect the index to retest support zone of 9670-9650.

On a cross-over above 10,100 Index would once again resume its upmove towards 10,500-10,600.

VIX (15.22):

VIX has been steadily trading in a range between 11 to 17 in the previous 3-4 weeks.

Above 17, it would directly spike upto 22-24 zone.

• FII’s for the past week have stayed net buyers in the derivatives markets but sellers in Cash Market while DII’s have been Net Buyers for the week gone by. 

• Nifty Futures have closed at a 15 points premium compared to 5 points discount a week earlier.

Cumulative FII Derivatives Stats from 28/07/2014 to 01/08/2014:

Index Futures: -395 Cr;

Index Options: +4402 Cr;

Stock Futures: -35 Cr;

Stock Options: -18 Cr

Cash Market:

FII: -3022 Cr;

DII: +3066 Cr.

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Deri Roll JULY to AUG 2014

Rolls in NIFTY futures lower than last month with NIFTY rolls at 68% (last month 71%), higher than 6-month average of 63.3%, also in value terms, it is at 10943 Cr. versus 11109 Cr. (NIFTY was up by 3.5% in last series, number of shares have decreased to 141 lakh versus 147 lakh shares). On other hand, market wide roll was flat at 81% (last month 79%) in value terms 53386 Cr which is more than last month 58284 Cr., (in share terms it saw decrease, along with price action as some individual stocks have increased 10-15% on price chart) leading to overall position lower  64330 Cr Vs 69393 Cr. (dip M-o-M) in futures positions Roll Cost is at 0.36 which is lower Month on Month of 0.54, also below 3mth avg. of 0.70, with NIFTY cost also at 0.38 (lower than with  0.61 avg. of 3 months, and last month 0.53). Also, NIFTY/STOCK Fut. ratio has decrease to 0.21 (last month 0.19), implies market participants have increased bets on Individual stocks, implying market participants feel NIFTY may consolidate.

Nifty front PCR_OI opened below 1 at 0.78 (higher last month 0.73, but less than 6mth Avg. 1); with 8000 CE having highest OI across options as 39.9 lakh, (13.4 lakh shares add on Thursday), implying CE writers are convinced NIFTY will find resistance around 7950-8030; on support side PE OI  is at  7500 and 7600 31 and 27 lakh shares each, (Thursday 7500 add 9.2 and 7600 8.04 lakh Shares add), implying 7450-7550 will be crucial support zone; Index options positions have  increase to 64545 Cr (last month 59847 Cr) however if we take premium in consideration, Options increase in line with market participants clearly placing bets on VIX to move up till 19.9, till it remains below 19.9-20, Bulls will have upper hand NIFTY will continue to consolidate positive bias, We feel Nifty trading range for this series would be 7450-8030, as we enter the AUG Series.

Among stock futures positions have declined in Mid Caps and increased in Large Caps implying traders booking profits as we approach AUG.; making stock specific activity crucial; sectors that can outperform Index in the AUG. Series BANKING (PSU Banks), IT, INFRASTRUCTURE, FERTILIZER, FMCG, PHARMA, TELECOM C-o-C improve; On other hand Shorts seen CEMENT, CAP.GOODS, AUTO, FINANCE (Barring HDFC), POWER, REALTY; Individual stock picking required.

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