Weekly Outlook Indian Stock Market (15 - 19 Mar)

WEEKLY TECHNICALS
High: 5158.10
Low: 5092.05
Close: 5137.00
Change: +48.30
RSI (14 Days): 56.54
Pivot: 5129
Support: 5100, 5064
Resistance: 5166, 5195

TECHNICAL CUES
Last swing low is at 5092. (Higher low)
Medium term
Nifty is in uptrend (from 26th Feb.) with targets of 4990**, 5070**, 5150**. (All targets achieved)
The uptrend will ‘terminate’ below 5049.
Short term
Nifty is again in uptrend (from 11th March.) with targets of 5180, 5230.
The uptrend will ‘terminate’ below 5092.
Resistance: In the week ahead, 5165, 5185 would be huge resistance level for nifty. Only if nifty trades above 5185 with volumes, it can move to higher targets of 5215 and 5250.
Support: 5092 would be huge support area for nifty next week. If it breaks and trades below 5090 with volumes, nifty will move down to 5050, 5000 in the week ahead.

OPTION CUES

OVERALL VIEW

• On March 12, Nifty future (near month) closed with the premium of 11.10 points at 5,148.10.
• During this week, most of the open interest accretion witnessed in the range of 4,800 to 5,100 Put, while, on the flip side, highest open interest was build up in the range of 5,100 to 5,300 Call.
• On the last day of the week, the put-call ratio reached at 0.86 times.
• India VIX (Volatility Index) is at 19.73%, a decrease of 101 basis points from previous week.
• FIIs turned out to be net buyer in the last 5 trading days.
• Looking at the data, Nifty is expected to trade in the range of 5,150 and 5,000. Net buying by the FIIs in Index Futures in the last few days of the week coupled with low volatility showing a positive sign. However, selling in Stock Futures with lower PCR might cap the gains in Nifty.

Nifty is likely to correct
The week gone by witnessed Nifty, taking a pause and consolidating within a very narrow range. It was a quiet week where neither the bulls succeeded in taking the Nifty to higher levels nor the bears were able to drag it to the lower levels resulting in a range bound movement. Though, it made an attempt to breach the resistance at 5,150 levels and support at 5,100 levels but did not succeed. In the coming week, Nifty is expected to correct as it has already given a good rally and its technical indicators are suggesting a correction. It’s daily stochastic has entered the overbought zone supporting a downward move, RSI is very close to the overbought zone 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. Nifty can correct either by continuing its consolidation or falling to the lower levels in case it does not get support from the Global markets. If Nifty breaches the resistance level at 5,150 decisively, it can move upwards until 5,300. Downside, 5,100 is the immediate support for Nifty and if this level is breached, it can move downwards until 5,050-5,000. Global markets will play crucial role in deciding the trend of the Indian market.

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