Weekly Outlook Indian Stock Market (29 Mar – 02 Apr)

 

WEEKLY TECHNICALS
High: 5293.75
Low: 5187.05
Close: 5282.00
Change: +19.20
RSI (14 Days): 61.38
Pivot: 5254.27
Support: 5215, 5148
Resistance: 5321, 5361

TECHNICAL CUES

• On March 26 Nifty future (near month) closed with the premium of 10 points at 5,292.
• On the last day of the week, the Put-Call ratio reached at 0.87 times.
• Average Cost of Carry for the week increased to 7.14%.
• India VIX (Volatility Index) is at 18.03%, an increase of 6 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 5,325 and 5,200. Net selling by the FIIs in Index Futures in the last few days of the week coupled with rebound in volatility showing a downturn in market.

OPTION CUES

During this week, most of the open interest accretion witnessed in the range of 5,000 to 5,200 Put, while, on the flip side, highest open interest was build up in the range of 5,300 to 5,400 Calls due to writing which are major resistance for Nifty.

OVERALL VIEW
Nifty is likely to correct
Nifty commenced the week on a subdued note on the back of rate hike by the Reserve Bank of India and weak global cues. However, it succeeded in holding the crucial 5,200 support level throughout the week and continued its upward journey after this short correction. The momentum on the upside was witnessed till the end of the week and Nifty managed to close around 5,280 mark. In the coming week, Nifty is expected to correct as it has already given a strong upward rally and its trading very close to its major resistance at 5,300 which is expected to restrict its further upward move. The technical indicators are also in the profit booking phase. The RSI and Stochastic have entered the overbought region suggesting a downward move and the MACD is showing maximum divergence and it is just about to give a sell signal by crossing below its signal line. It can correct either by consolidating or by moving downwards. Downside, 5,200 is the immediate major support and if this is breached, a fall until 5,100-5,050 can be expected. Upside, it can test 5,400 level incase it get support from its global counterparts and manages to breach 5,300 level decisively. Global Markets will remain the key deciding factor for the trend in our market.

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