NIFTY PREDICTION FOR NEXT WEEK 5 JULY TO 9 JULY 2021

WEEKLY RESISTANCE FOR NIFTY: 15800, 15900, 16000

PIVOT POINT: 15700

WEEKLY SUPPORT FOR NIFTY:  15600, 15500, 15400

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 15750, 15800, 15850

PIVOT POINT: 15700

DAILY SUPPORT FOR NIFTY:  15650, 15600, 15550

DAILY CHART FOR NIFTY

Trading for the week started with an upside gap at new record high. However, since there was follow up buying missing in the heavyweight constituents, the Nifty kept correcting gradually after registering a high of 15915 in the opening trade. For the major part of the day, index consolidated with a mild negative bias to eventually conclude tad above the 15800 mark by shedding nearly three tenths of percent. We had a flat start on Tuesday since there was no major trigger on the global front. In the initial trade, market slid lower and within no time, Nifty was back to 15750. Around the mid-session, bulls made a valiant attempt to recover but the selling reappeared after reaching the 15800 mark. Eventually, Nifty ended the session tad below 15750 by losing more than four tenths of a percent. Our markets opened slightly higher on Wednesday as indicated by the SGX Nifty.  During the  first  half,  Nifty  continued  its  northward march  to  surpass  the  15800  comfortably.  However  the  weaker banking  space dragged  the benchmark index lower  once again and as a result, Nifty kept sliding in the latter half to not only erase all gains but also concluded marginally in the red. For the second straight session, we started the proceedings marginally higher on Thursday as indicated by the Nifty. However, the buying interest is still missing and as a result, markets are finding it extremely difficult to sustain at higher levels. Barring one attempt of recovery at the mid-session, the index remained under a bit of pressure throughout the session. However the damage is not big though and hence, the weekly expiry ended tad below 15700 with nominal losses.

NIFTY: A STRONG SUPPORT WILL BE @ 15500; STRONG RESISTANCE LEVEL SEEN @ 15900

It was yet another dull week for our markets and the financial space once again disappoints. After a significant rally we tend to see  such  consolidation  in  key  indices,  but  generally  the  action continues in individual themes. This time, the stock specific action is also missing and that has been the real frustration for traders. For the coming session, 15600 – 15500 is to be seen as crucial support zone. If any recovery has to happen on the weekly expiry session, it should come from the mentioned supports only and for this, the banking index needs to contribute significantly. On the flipside, the immediate hurdle remains at 15800 – 15900.

TECHNICALLY SPEAKING ON NIFTY BANKNIFTY FUTURE/OPTION 

Nifty has continued to move in a range for successive trading sessions this week and is likely to continue the trend in the coming week. Overall the Nifty has fallen 1.5% so far this week sliding from all-time highs. For the coming week Nifty is unlikely to move past the 15700-15750 zone. A move below 15500 could attract bears. Nifty entered the July series after gaining consecutively for previous three Futures & Options series.

The outlook for Nifty and Bank Nifty for the upcoming expiry weekly expiry session is much identical and on similar lines. Nifty had seen the highest CALL OI concentration at 16000; however this has drifted lower to 15700 followed by the second highest CALL OI at 15800. For the coming week Nifty is unlikely to move past the 15700-15750 Zone. The same is the case with Bank Nifty. Bank Nifty has maximum CALL OI at 35000 and the highest PUT OI at 34500. The index is likely to stay capped with any major move unlikely on any side. Nifty and Bank Nifty saw their highest rollovers in a decade at 80% and 79% respectively. This was fueled by massive retail participation. Now the major point to observe is that retail participants are classified as non-commercial/non-professional investors and they are wrong at major market tops as history shows it. This is one sentiment indicator and reading of this data also hints at a formation of a likely top in the market unless the 16000 points is taken out convincingly. It is a complete range-bound market where option writers are making money. Although the premiums are on the lower side the decay that we are seeing is pretty fast. As long as 15500 is not broken on the downside and 15900 is not broken on the upside the consolidation may continue. The reason for consolidation is the rising dollar index while rupee is getting weaker and FII are still not in the buy mode in the cash segment. Broadly till we are trading in the said range it is an option writer’s market and once the breakout happens that is where the momentum comes in. 

Global cues are fine; only the emerging market kitty is not attracting fresh flows. We saw a bullish engulfing candle last week which has not repeated this week. Best thing to do is stick to strength stock.  Nifty Open Interest Put Call Ratio fell to 1.12 levels from 1.30 levels. Amongst the Nifty options of 8 july 2021 expiry Call writing was seen at 15800-15900 levels Indicating resistance is seen around 15900 levels. On the lower side support is seen in the vicinity of 15600-15700 levels where we have seen Put writing.

To sum it up short build up in Nifty futures Long unwinding in the Bank Nifty Futures Call writing at 15800-15900 levels and short build up by FIIs’ in the Index Futures segment Indicates that one should remain cautious for the markets. Therefore our advice is to remain cautious and wait for the Nifty to cross 15900 levels for going long aggressively. On the lower side 15600-15700 level will act as an immediate support where Puts have been written. In the Bank Nifty our advice is to remain cautious till it closes above 35000 levels. On the lower side support is seen in the vicinity of 34500-34700 levels. Despite all the volatility IVs continued to remain choppy and no major hedging positions were formed which is pointing towards more upsides in coming days. For the July series highest Call base is placed at 16000 followed by 16200. However in case of any profit booking June series major support of 15600 should provide cushion. We feel short covering should trigger in private banks which should push the Bank Nifty towards 36500. For a major part of the June series Bank Nifty remained laggard and from expiry to expiry bases apart from HDFC bank most of them ended negative. We feel the July series should be the month for banking and outperformance could be possible from the banking space which should push the Nifty towards 16200. No sizable OI additions were seen on the Call side. However Put writing block of almost 15 lakh shares was visible in 35000 strike option for the coming weekly expiry. This level should act as a major support for the coming weekly expiry. Nifty weekly contracts have highest open interest at 15800 for Calls and 15700 for Puts while monthly contracts have highest OI at 16000 for Calls and 15500 for Puts. Highest new OI addition was seen at 15700 for both Calls and Puts in weekly and at 16000 for Calls and 15000 for Puts in monthly contracts. FIIs increased their future index long position holdings by 1.94% and their future index short position by 17.83%. FIIs cut their position in index options by 32.33% in Call longs 46.08% in Call shorts 14.11% in Put longs and 28.49% in Put shorts.