NIFTY WEEKLY OUTLOOK & OPTION CALL PUT TIPS FOR 3 SEP TO 6 SEP 2019

WEEKLY RESISTANCE FOR NIFTY: 11100, 11200, 11300

 PIVOT POINT: 11000

WEEKLY SUPPORT FOR NIFTY:  10900, 10800, 10700

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 11075, 11150, 11225

PIVOT POINT:11000

DAILY SUPPORT FOR NIFTY :  10950, 11875, 10800

DAILY CHART FOR NIFTY

During this week, the index has seen high volatility wherein initially the index recovered sharply from the recent swing low, and has now given up some of these gains in last couple of sessions. However, if we look at the short term charts, it seems that the Nifty has completed its corrective phase during last week and after rallying about 500 points from the low in just three sessions, the index is showing a pullback move.  A slew of announcement from FM Sitharaman on last Friday evening caused massive gap up opening of the week. However, immediately index lost this early morning lead which was a knee jerk reaction of escalated trade war between the US and China. Due to this, index not only erased all opening gains but also went on to sneak well inside the negative territory. Things looked extremely bleak at one point of time, but fortunately, we witnessed enormous buying interest at lower levels which kept on accelerating till the closing point of the day. Eventually, Nifty concluded with a colossal intraday rally of more than 300 points from the low and 200 points from the previous close. After ending on a high note on Monday, the Nifty continued the momentum and opened on a positive note on Tuesday. Post some momentum in initial couple of hours, the index traded a narrow range for rest of the day and ended near the opening levels, marking gains of half a percent over previous session’s close. Although the index traded in a narrow range yesterday, the broader markets witnessed good momentum as the market breadth was clearly in favor of the advances. In last three sessions, the index has gained about 500 points from the low registered on Friday. Post the sharp upmove of about 500 points from the swing low in three trading sessions, the index retraced some of the gains and corrected in Wednesday’s session to re-test the 11000 mark, the index then recovered some of the losses in last half an hour and ended the session with a loss of about half a percent. After retracing about 38.2% of the recent correction, the index corrected back towards the 11000 mark. The benchmark indices opened on a negative note ahead of the F&O expiry of August series on Thursday. The Nifty witnessed selling pressure and registered low of 10922 as some of the heavyweights were seen under pressure. The last couple of hours witnessed significant volatility as the index recovered the losses to retest the morning highs and then again corrected in the last hour to end the session with a loss of about 100 points. Nifty remained highly volatile throughout Friday’s session and traded in wider range of 150 points. It drifted towards 10,880 level in the first half of the day, but recovered sharply from lower levels to extend the gains towards 11,040 and managed to close above 11,000. 

NIFTY: A STRONG SUPPORT WILL BE @ 10800; STRONG RESISTANCE LEVEL SEEN @11200

The retracement supports of this recent upmove are placed around 10950 and 10930.. The immediate resistance for Nifty is seen around 11100-11200 which we believe would be surpassed soon. In our sense, previous week had set the tone for what we witnessed this week’s trading session.

TECHNICALLY SPEAKING.

It is easy saying in the hindsight but considering our intraday stance, we were not surprised with this colossal move. This is typical kind of session, when most of the market participants are left clue less and markets are off considerably from the lows before anyone could realise it. Now the point is what’s next? In our sense this rally has further legs to unfold and immediately, we expect it to get extended towards 11200 – 11300 levels. This V- shaped recovery has also been supported with participation from most of the sectors which is a positive sign. The immediate resistance for the index placed around 11150-11200 which is the 38.2% retracement of the impulsive decline seen from 5th July and the ‘200 SMA’ on the daily & weekly chart. However, we are of the opinion that the short term corrective phase is behind us and hence, instead of selling near the resistance, traders should now approach a ‘Buy on dip’ strategy and find buying opportunities on any declines. As far as support is concerned, 11000 and 10950 are seen as the immediate support levels.