NIFTY WEEKLY OUTLOOK & MAY EXPIRY TRADING TIPS 29 JUL TO 2 AUG 2019

WEEKLY RESISTANCE FOR NIFTY: 11400, 11500, 11600

 PIVOT POINT: 11300

WEEKLY SUPPORT FOR NIFTY:  11200, 11100, 11000

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 11350, 11450, 11550

PIVOT POINT:11275

DAILY SUPPORT FOR NIFTY :  11325, 11225, 11125

DAILY CHART FOR NIFTY

This week’s mayhem continued as we saw a gap down opening of the week followed by a sustained selling throughout the first half in Monday’s session. This sell off was disheartening because the stable propositions like HDFC Twins and Kotak Bank also finally succumbed to the market destruction. These marquee names have been reluctant to correct since many months and in fact, have propelled index to the record highs. But monday, they looked completely dejected and hence, correction reinforced to test the 11300 mark. Fortunately, the selling got arrested in the latter half and we had a small bounce back to eventually close around 11350. Tuesday, started slightly higher but similar to recent trends, this gap up opening was merely a formality and in the initial hour, we were back to Monday’s low. Once again, we saw some respite at lower levels and in the penultimate hour, index surged towards the 11400 mark. Things looked good but mighty bears had other plans as we saw a complete nosedive once we stepped into a final hour. In the process, we erased all gains in a flash and due to mild recovery towards the end, Nifty closed with marginal losses. Wednesday seems that our markets are not even interested looking at what global market was doing. While US bourses hitting record highs every day, our market still looks dejected and Wednesday too, we had a massive cut in the first half after breaching the 11300 mark. Fortunately, the fall got arrested at a kissing distance from 11200 and thereafter, we kept oscillating with volatile swings throughout the remaining part of the day. Eventually, the Nifty concluded with over half a percent cut. Thursday had a flat opening owing to mixed global cues. However, during the first half an hour of the trade, we saw strong bout of buying to push the index near Wednesday’s high of 11359. In fact, in this process, Nifty managed to surpass it by a small margin and then similar to recent trend, this lead got sold into. Thereafter, index struggled throughout the remaining part of the day to eventually conclude the July series at two month’s low.  Friday market ended lackluster trade with marginal gains. Nifty traded range-bound for better part of the day tracking corporate earnings and weakness in global markets. Nifty settled at 11284 mark up 32 points.

NIFTY: A STRONG SUPPORT WILL BE @ 11100; STRONG RESISTANCE LEVEL SEEN @11500

In this week the selloff intensified in our markets and this time, market is not willing to spare the stable names as well. Since last couple of days, 11300 has been acting as a sheet anchor and hence, yesterday we saw complete nosedive after breaching this key support in the beginning of the week. Fortunately, Nifty saw some mild recovery on friday; but the index continued to grind lower and is now trading at nine-month low. During the week, we saw couple of attempts to show some strength but it seems that market is extremely dejected and is not willing to show any kind of stability. This  As far as levels for our benchmark is concerned, 11200 – 11100 would be seen as immediate levels in the downward direction and on the flipside, 11300 followed by 11400 would now be seen as immediate hurdles. We are now in august series session and hence, we may see some volatile swings on both sides. At present, traders are advised to stay light and should avoid taking undue risks. In this typical kind of scenario, when market tries to prove ‘hope trade’ wrong and till the time, traders are not giving up, similar sort of underperformance is likely to continue. During the week, we saw couple of attempts to show some strength but it seems that market is extremely dejected and is not willing to show any kind of stability. As far as levels are concerned, 11300 – 11400 would be seen as immediate levels in the downward direction and on the flipside, 11200 followed by 11100 continue to act as a sturdy wall.

TECHNICALLY SPEAKING.

Our benchmark has fallen quite a bit in last three days and in this course of action, within no time, we are off record highs by more than 5% now. Looking at the chart, we can see index reaching its major support zone of 11200, which coincides with the ‘Multi-month’ trend line (drawn by connecting October 2018 and February 2019 lows) as well as the 78.6% retracement of the entire rally from 11108.30 to 12103.05. Technically nothing much has changed and the real pain still lies in banking which was the major driver since many months. The overall chart structure and levels remains the same as we had highlighted in the last week report. The major support zone lies at 11200, which is the convergence point of multiple technical evidences. If we manage to hold it, a possibility of similar kind of weekly rally cannot be ruled out. In this scenario, 11350 – 11450 are the levels to watch out for. We reiterate that the overall chart structure has been distorted and till the time we are below 11350 – 11300, intermediate rebounds should only be treated as a short term relief. On the flipside, a sustainable breach of 11250 would extend this correction towards 11175 – 11100 levels. At present, traders are advised not to trade aggressively and should refrain from catching falling knives from high beta universe. However, we still believe that, traders’/ investors’ with a slightly broader perspective, should accumulate quality propositions in staggered manner in this on-going decline.