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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