NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 13 AUG TO 16 AUG

WEEKLY RESISTANCE FOR NIFTY: 11200, 11300, 11400

 PIVOT POINT: 11100

WEEKLY SUPPORT FOR NIFTY:  11000, 10900, 10800

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR  NIFTY: 11100, 11000, 10900

PIVOT POINT:10900

DAILY SUPPORT FOR NIFTY :  110850, 10800, 10700

DAILY CHART FOR NIFTY

Last 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 @ 10850; STRONG RESISTANCE LEVEL SEEN @11300

Friday’s smart recovery has built some hopes of a short term relief move and since the low of 10848 coincides with multiple technical evidences and key Fibonacci ratios, a possibility of some respite cannot be ruled out. On the daily chart, we can see a copy book harmonic pattern known as ‘Bullish Cypher’ pattern. Also on the weekly chart, we can see convergence of ‘89 EMA’ as well as the multi-month ‘Upward Sloping Trend Line’. Hence going ahead, as long as this week low is intact; we may see Nifty rebounding towards 11200 - 11350 levels. However, having said that, it would be difficult to comment whether Index has bottomed out or not. At higher levels, one needs to lighten up positions and if we slide below this key support, be prepared for further slide. With a broader view, we still believe that this decline is providing excellent opportunity for investors and hence, quality names should be accumulated in a staggered manner.

TECHNICALLY SPEAKING.

We have managed to reclaim key Fibonacci ratio and the daily & weekly chart now depicts a ‘Bullish Hammer’ pattern. Yes, they said pattern needs to have confirmation in the form of a close above 11200. Also, the reading on the ‘RSI-Smoothened’ oscillator on daily chart has reached the lowest level since October 15, 2018. Hence, since last four sessions, although markets are falling in initial trades, they are attempting to rebound as well. Probably in next couple of days, markets would give some respite towards 11300 – 11500. Now Nifty is hinting towards one more gap down opening and in such case 11100 – 11000 are likely to act as strong support zone.