NIFTY WEEKLY OUTLOOK & OPTION CALL PUT TIPS FOR 23 SEP TO 27 SEP 2019

What a splendid Day it was. Nifty’s High jump from 10670 to directly 11381. Thank to FM Nirmala sitharama for corporate tax bonzana.  Sensex skyrockets 1921 points to log biggest gain in 10 years on tax cut euphoria; Nifty zips past 11250. 

WEEKLY RESISTANCE FOR NIFTY: 11400, 11500, 11600

 PIVOT POINT: 11200

WEEKLY SUPPORT FOR NIFTY:  11100, 11000, 10900

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 11350, 11450, 11550

PIVOT POINT:11250

DAILY SUPPORT FOR NIFTY :  11150, 11050, 10950

DAILY CHART FOR NIFTY

What a historical day it has been for corporates, the equity market and consumers. The government, like in a T20 game, opted for some serious hitting and managed to hit it out of the park as it announced a string of measures to lift the economy. The steps, including reducing the corporate tax rate to 25% from 35% for existing domestic companies and an attractive rate of 15% for new companies set up after October 1 and commencing operations before 2023, were greeted with uproarious cheer by the equity market.
The way we concluded previous week on Friday, market was all set to have a gap up opening on Monday of this week to surpass the major hurdle of 11150-11180. But, due to Saudi oil attacks over the weekend, crude oil prices spiked up more than 10% which spooked traders across the globe. We being the crude oil sensitive economy could not be spared with it. The week started off lower and minor attempt of recovery eventually got sold into to end the session tad above the 11000 mark. Tuesday after a flat start, our markets witnessed an open-high scenario as from the word go Nifty witnessed selling pressure. For the first half, Index witnessed a gradual fall however in the second half after no signs of recovery the selloff aggravated and eventually ended with a loss of 1.69% at 10818. As hinted by Nifty our markets started on a positive note on Wednesday with more than 50 points gain however the rub-off effect from the previous session pulled Index lower to erase all gains in the first hour itself. Subsequently, Index managed to hold on to the previous session low around 10800 and after a tiring session of consolidation eventually ended with minor gains of 0.21% at 10841. On Thursday in line with mixed global cues our markets started on a flat note, however, Index immediately started witnessing selling pressure and within the first few minutes itself broke previous two session’s support of 10800. Subsequently, the undertone remained weak as Index continued to slide lower throughout the session and eventually ended with deep cuts of 1.25% tad above 10700 levels.

NIFTY: A STRONG SUPPORT WILL BE @ 11000; STRONG RESISTANCE LEVEL SEEN @11500

It was flawless week for traders (with bullish view) wherein the index provided a good buying opportunity. Post registering a low tad below 10650, the Nifty rallied smartly along with broad market participation and reclaimed the 11300 mark. In this process, both the indices Nifty and BankNifty surpassed the high of the ‘Dragonfly Doji’ pattern formed on the weekly chart and have closed above the same, thus confirming a reversal. Although the index consolidated around 11000 for most part of the week. Considering Friday’s move in the broader markets, we expect the index to head towards the 11300-11500 mark soon (which we eventually expect to be surpassed). On the flipside, the immediate supports for the index are placed around 11000 and 10800.

TECHNICALLY SPEAKING.

During last week, we had highlighted about the formation of reversal pattern on the weekly chart of Nifty. This, along with the ‘Fibonacci Time Retracement’ had indicated about probability of an up move in the broader markets. During the week, index along with the broader market witnessed decent up move which was very much on our expected lines. Now, if we observe the Nifty daily chart, it is seen that the recent price action has also led to a formation of an ‘Inverse Head & Shoulders’ pattern which is a trend reversal pattern. A move above the 11300 mark will lead to a breakout, which could then provide impetus to the on-going rally. Looking at the overall development in last couple of weeks, we will not be surprised to see it happening soon (probably on Monday itself). This will lead to some short covering moves first and then will also attract traders who have been waiting on the side-lines for this confirmation. In this scenario, the northward trajectory will continue towards 11400-11500 first and then may even extend up to 11600- 11700. Hence, we continue with our recent optimistic stance and advice traders not to venture into taking any contra bets. The immediate supports for the index are placed around 11200 and 11000.