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.