NIFTY CHART & NIFTY WEEKLY REPORT FOR UPCOMING WEEK 8 MARCH 2016

WEEKLY RESISTANCE FOR NIFTY: 7455, 7662, 7769, 7875

PIVOT POINT: 7247

WEEKLY SUPPORT FOR NIFTY :  7141, 7034, 6827, 6770

WEEKLY CHAT FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 7476, 7500, 7525, 7598

PIVOT POINT: 7452

DAILY SUPPORT FOR NIFTY :  7440, 7427, 7403, 7379

DAILY CHART FOR NIFTY

RALLY GETS EXTENDED POST BUDGET.

As expected the market went into a short covering mode on completion of the Union Budget. Last week, it was mentioned that no negative news will be perceived as good news for the market; the market played on similar lines as there were no devils in the Budget. There was no structural change in Long Term Capital Gain Tax, and the Fiscal Discipline targets were adhered to. This pushed the market higher and the Bears had to run to cover their shorts. Thus Nifty tested and overcame Resistance zone of 7323-7363 and now is on course to test the strong Resistance zone of Nifty 7534-7600.

SHORT TERM TREND TURNS POSITIVE.

This week, both the indices recovered and managed a close above the short term average of 20dma Nifty   7174 and even the medium term average of 50dma Nifty 7420. But Nifty continues to remain well below the long term average of 200dma Nifty  7948. Thus, the trend in the short term and medium term timeframe has turned positive whereas the trend in the long term timeframe remains bearish.

SHORT COVERING RALLY LEVELS.

The indices are witnessing a Pull-Back rally, the genesis of which lies in short covering. For the Immediate short term, we are considering the fall from Nifty 7972. The relevant Retracement levels for Short Term are placed at Nifty 7264-7399-7534. In the Intermediate term, we consider the fall Nifty from 8336. The relevant Retracement levels for Medium Term are placed at Nifty 7403-7581-7759.

BULLISH GAP UP.

While moving higher, Nifty left behind a Bullish Rising Gap between Nifty 7308/7235. This Gap will acts as strong Support going forward. Besides this Gap is also a Measuring Gap, the relevant Target as per Gap Theory falls at Nifty 7718.

OSCILLATOR ANALYSIS.

MACD, despite being in the negative zone, continues with its Buy signal. Price ROC is positive and hence continues with its Buy signal. RSI (59) suggests Bullish Momentum.

VOLATILITY CRUNCH AS EXPECTED.

Post Budget, Volatility Index India VIX dropped from 22 to around 17 levels. This event is called Volatility Crunch and it exactly played out as expected. Option traders who created short Vega strategies would have benefited immensely. Options data for February series indicates highest Put Open Interest build-up at the strike of 7000 and highest Call build-up at the strike of 7500. Thus Option data suggests a trading range with resistance coming in at 7500 and support at 7000.