WEEKLY REPORT~~~!!!

Indian Markets have witnessed selling pressure on rises around 8360 after rebounding from lower support levels of 7960 upto 8360 in the previous week & have closed with a mild flat to negative bias for the week gone by.

The Parliament Session ended with a Logjam in Lok-Sabha & with Government finding difficult to pass Insurance FDI bill in Rajya-Sabha, it adopted an ordinance route.

On the Global Front,

US Q3 GDP expanded at 5% for July-Sept Quarter, the fastest & the strongest pace since Q3, 2003 & was better than consensus expectations of 4.6%. This led to Dow Jones crossing a record 18000 mark which in turn brought stability in the Global Markets too.

CNX Nifty (CMP 8201):

Last Week, Nifty exactly reversed from 61.8% retracement of the fall from 8623 to 7963 i.e 8365 & resumed its downside journey which does not come as a surprise as the relief rally from the bottom of 7963 to 8364 was too fast & swift & Markets needed to take a breather before further upside.

Expect Index to retest & find support around 8125-8140 zone & if 8125 holds, Index could witness rebound upto 8290-8295. Only on a cross-over above 8295, bearish counts would get negated & the index would march ahead upto 8380-8410 zone minimum. 

If Index breaks & sustains below 8125, would witness a retest of support zone around 8020-7960 zone. 

Nifty sustained below its 50 day SMA for second consecutive week indicating negative trend in the short term.

Stochastic is placed below its averages on daily charts as well as weekly charts.

MACD is placed below its averages on Daily charts while RSI is placed below its average on weekly charts which would lead to some pressure from higher levels.

RSI being above its average on daily charts along with MACD being placed above its averages on weekly charts would lead to buying on dips.

Hence Range for the coming week could be 8125-8340.

On the Roll-Over Front,

Rolls in NIFTY futures lower than last month with NIFTY rolls at 66% (last month 76%), lower than 6-month average of 70%, also in value terms, it is at 17632 Cr. versus 18758 Cr. (NIFTY was up down  3.77% in last series, number of shares also moved up at 213 lakh versus 219 lakh shares). On other hand, market wide also dropped at 82.5% (last month 84%) in value terms 57913 Cr which is lower than last month 63766 Cr., (in share terms it was down, along with price action as some individual stocks have dropped 10-15% on price chart) leading to overall position lower 78727 Cr vs 82525 Cr. (dip M-o-M) in futures positions Roll Cost is at 1.07 which is higher Month on Month of 0.62, also higher than 3mth avg. of 0.62, with NIFTY cost also at 1.26 (higher than  0.58 avg. of 6 months, higher than last month 0.62). Also, NIFTY/STOCK Fut. ratio flat at 0.29 (last month 0.29), implies market participants have increased bets on Index, implying market participants feel NIFTY may continue upward journey.

Nifty front PCR_OI opened above 1 at 1.04 (in line with last month 0.86, last  4mth Avg. 0.81) with 8000 PE having highest OI across PE options as 39.3 lakh, (11.2 lakh shares add on Wednesday), implying PE writers are convinced NIFTY will find support around 8010-8100; on support side CE OI  is at  8400 30.89 lakh shares, (Wednesday add 17.25 lakh Shares), implying 8429-8485 will be crucial resistance zone; Index options positions have  decreased to 70326 Cr (last month 78021 Cr) however if we take premium in consideration, Options decrease in line with market participants clearly placing bets on VIX to move with-in range till 11.8-16.9, till it remains below 16.9, Bulls will have upper hand NIFTY will continue to consolidate positive bias, We feel Nifty trading range for this series would be 8010-8485, as we enter the DEC. Series.

Among stock futures positions have increased in Large Caps implying traders taking stock specific  in DEC; making stock specific activity crucial; sectors that can outperform Index in the DEC. Series BANKING, FINANCE, MEDIA, METALS C-o-C improve; On other hand Flat Rolls seen FMCG, PHARMA, CAPITAL GOODS, IT and OIL & GAS suggesting more Long Unwind; need to look at new positions being added.

 

 

BANKNIFTY (CMP 18557):

Expect Index to retest & find support around 18250-18300 zone & if 18250 holds, Index could further witness further upside upto 18850-18900. 

If Index breaks & sustains below 18250, would witness a retest of support zone around 17800-17750 zone. 

 

Going forward,

Movement of the Markets would be dictated by FII Fund Flows, Global Market Trends, movement of Rupee against the Dollar & crude oil price movement. Expect the coming week to be a lackluster one with major FII’s in a Christmas Holiday Mood.

 

Q3FY15 results of Indian corporates slated to be announced starting January 2015 would be on the Investors radar & close watch would be on the Management tone which would lead to a revision in the future earnings forecasts.

 

On the Global Front,

Markit Economics will unveil data on China HSBC PMI for the month of December on Wednesday 31^st December, 2014.

US, Eurozone & France HSBC PMI data for the month of December 2014 would be unveiled on Friday, 2^nd January 2015.

 

USDINR (CMP 63.55):

USD INR has stabilized in the past week between 63-64 zone with the Global Market Sentiments stabilizing.

Now Going Forward, Till Rupee holds 62.3 zone, would once again move upto 64.70-65 zone.

Below 62.3, would retest 60 zone.

 

BRENT CRUDE ($ 59.56):

Crude Prices after plunging to multi-year lows i.e from 115$ highs in June 2014 to below 57$ in the past couple of weeks have stabilized around 59-60 zone. However with OPEC countries re-iterating their stance of No Production Cuts, Crude prices continued to remain softer. The main reason for the softening crude prices are fall in demand from developed economies along with a stronger Dollar.

It has approached extremely oversold zone & hence if 57 is held, a pullback upto 66-68 cannot be ruled out.

But overall from 66-68 zone, selling pressure would re-emerge.  

 

DOW JONES (CMP 18,053):

Dow Jones has rebounded upto 18000 zone after correcting upto 17000 levels a week back.

Now Going Forward,

Till 17,650-17,700 holds, expect a rebound upto 18,550 zone. Below 17,650 can correct upto 17,200-17,100 zone.

 

Midcap: (CMP 12304)

NSE Mid-cap CMP 12,304 closed 1% positive for the week after trading in a extremely tight range. 

Going forward, till 12000 holds, Index could further witness further upside upto 12600-12650. 

If Index breaks & sustains below 12000, would witness a retest of support zone around 11600-11450 zone. 

 

Small Cap (CMP 10,894):

BSE Small-Cap CMP 11,068 closed 1% negative for the week. 

Going forward, till 10700 holds, Index could further witness further upside upto 11300-11450. 

If Index breaks & sustains below 10700, would witness a retest of support zone around 10400-10350 zone. 

 

VIX (14.51):

VIX has been hovering between 13 to 16 in the past week, however closed around 14.50.  

Going forward, till VIX stays below 17 i.e 200 DMA, it can retest the support zone of 11-11.50 which would imply buying support at lower levels.

Above 17, VIX could Spike upto 22-24 which would signal a possibility of a fresh sell-off.  

 

On the derivatives front,

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

• On a Weekly basis In Index Futures FIIs were Net Buyers to the tune of ` 281 Cr with an open interest decrease of around `6356 Cr which indicates Short Covering in Index Futures by FIIs.

 

• Nifty Futures have closed at a 68 points premium at the beginning of a fresh series as against a 23 point premium for the previous week.

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