Weekly Outlook Indian Stock Market (08 - 12 Mar)

WEEKLY TECHNICALS
High: 5118.65
Low: 4935.35
Close: 5088.70
Change: +166.40
RSI (7 Days): 59.06
Pivot: 5059
Support: 4999, 4909
Resistance: 5149, 5209

TECHNICAL CUES
Medium Term
Nifty is in uptrend (from 26th Feb.) with targets of 4990**, 5070**, 5150.
The uptrend will ‘terminate’ below 4834.
Short Term
Nifty is in uptrend (from 11th Feb.) with targets of 4880**, 4900**, 4960**, 5070**.
The uptrend will ‘terminate’ below 5049.
(Targets are +/- 20 points, ** means target achieved)
Resistance: In the week ahead, 5170 the Inverse Head and Shoulder target would be huge resistance level for nifty. Only if nifty trades above 5170 with volumes, it can move to higher targets of 5215 and 5280.
Support: 4863 the week low EMA would be huge support area for nifty next week. If it breaks and trades below 4863 with volumes, nifty will move down to 4753 in the week ahead.

OPTION CUES

OVERALL VIEW

• On March 05, Nifty future (near month) closed with the discount of 1.70 points at 5,087.
• During this week, most of the open interest accretion witnessed in the range of 4,700 to 5,000 put, while, on the flip side, highest open interest was build up in the range of 5,000 to 5,200 Call.
• On the last day of the week, the put-call ratio reached at 1.28 times.
• Average Cost of Carry for the week turned negative to 0.18%.
• India VIX (Volatility Index) is at 20.74%, a decrease of 328 basis points from previous week.
• FIIs turned out to be net buyer in the last 4 trading days.
• Looking at the data, Nifty is expected to trade in the range of 5,150 and 4,950. Net buying by the FIIs in Index as well as Stock Futures in the last few days of the week coupled with low volatility showing a positive sign. However, higher buying in Index options with higher PCR might cap the gains in Nifty.

Nifty is likely to correct
Nifty continued its post budget rally during the initial sessions of last week which was initiated after undergoing consolidation for almost a week before the budget announcement. It moved higher to test 5,100 levels which restricted its further upward move and lead it to consolidation later in the week. In the coming week, Nifty is expected to correct as indicated by its technical indicators. Its stochastic has entered the overbought zone supporting a downward move and the MACD is showing maximum divergence which indicates that it is about to give a sell signal soon by crossing below its signal line. It can move upwards during the initial sessions and expected to move downwards after facing resistance at higher levels. It is expected to face stiff resistance at 5,150-5,200 levels on the higher side incase it moves upwards from the current levels. Downside, 4,950 is expected to act as a strong support level. Global Markets will play crucial role in deciding the trend of the Indian market.

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