NIFTY WEEKLY REPORT & VIEW FOR NEXT WEEK 3 AUGUST TO 7 AUGUST 2020

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WEEKLY RESISTANCE FOR NIFTY: 11200, 11350,11500

PIVOT POINT: 11100

WEEKLY SUPPORT FOR NIFTY:  11000, 10900, 10800

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 11250, 11350, 11430
PIVOT POINT: 11050

DAILY SUPPORT FOR NIFTY:  10950, 10900, 10850

DAILY CHART FOR NIFTY

Trading for the week started marginally higher owing to favorable global cues. However, within a few moments, the lead disappeared to decouple with global peers first. After this what we witnessed was one of the rarest actions in our market. The Nifty and Bank Nifty looked completely divergent. The direction was similar (downwards) but the proportion of the decline was extremely wide. Looking at Nifty, it appeared as if markets are consolidating with mildly negative bias; but looking at banking index, it appeared as if there is no tomorrow. Yes, many times we see Bank Nifty underperforming the benchmark but Monday’s divergence was something different. Fortunately, Reliance and heavyweight IT counters were the saviors in case of Nifty, otherwise, taking their contribution out, the Nifty also would have closed with severe cuts. Tuesday too our markets opened higher as indicated by the SGX  Nifty; but unlike Monday, the lead was there to stay this time. After  a positive start, markets extended gains in the initial hour; but all of  a sudden, the banking index once again took a nosedive, resulted in  erasing of some gains in benchmark. However, post the midsession,  the entire market just took off and the smart recovery in banking  space added fuel to the spectacular rally to eventually reclaim the 11300 mark for the first time in last four months. Tuesday's tail end surge was followed by a flat start on Wednesday. As expected, in the initial trades, we witnessed a strong optimism to head towards the 11350 mark. Subsequently, the index consolidated with a hint of mild profit booking throughout the first half. However, post the mid-session, the selling aggravated in some of the heavyweights like Reliance, HDFC Bank, ICICI Bank and selective IT names. This resulted in a sharp decline to sneak below the 11200 mark. Due to some modest recovery at the end, the Nifty ended the session with a cut of nearly 100 points. After seeing a reality check on Wednesday, our markets started the Thursday slightly higher and then went on to extend the gains in the first half. However, around 11300, Nifty was unable to display similar strength and hence, the weak attempt eventually resulted in a sharp decline in the latter half. The selling augmented after breaking all important intraday supports one after another to test the 11100 mark. In the process, the July series expiry panned out on a disappointing note. The domestic stock market ended Friday's volatile session in the negative territory, weighed down by heavyweights Reliance Industries (RIL) and the HDFC twins. The Sensex ended 129 points lower at 37607 while the Nifty gave up the 11100-mark to settle at 11073, down 29 points.

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

Traders are advised to stay positive and a decline towards 11250-11200 should now be treated as a buying opportunity. On the upside, 11350 is the level to watch out for; whereas, 11000 has now become a key support. However, a breach of lower end should be treated as a short-term pause to see some decent profit booking.

TECHNICALLY SPEAKING.

There are multiple technical  observations, we  are  extremely overbought, we are in two minds whether to go with the theoretical characteristic of this term ‘overbought’ or the practical one.  Because, theoretically, the current placement (78% retracement of the post COVID fall which coincides with 100% ‘price extension’ of recent swings from March bottom) of market is just ideal to see some genuine correction; but practically as we all know, market has the tendency to surprise us all the time. Hence, rather anticipating things from here on, we would rather let the market give us further indication. As we step into the august f&o series, our eyes would be on a few crucial levels. On the upside, 11350 is the level to watch out for; whereas, 11000 has now become a key support. As an optimist, one should remain hopeful as long as we are trading above this swing low and expect the market to give breakout in upward direction to extend the move towards 11400 – 11500. However, a breach of lower end should be treated as a short-term pause to see some decent profit booking. We do not want to give much weightage to this pattern now. today, although the key levels are still unbroken, but the way market dipped, it has shaken the confidence of the bulls and we need to pay attention to this behaviour now. Nifty has reached a cluster of resistance and hence aggressive longs here are strictly avoided.