Weekly Outlook Indian Stock Market (03-07 May)

WEEKLY TECHNICALS
High: 5342.35
Low: 5202.45
Close: 5278.00
Change: -26.10
RSI (14 Days): 60.62
Pivot: 5274
Support: 5206, 5135
Resistance: 5346, 5414

TECHNICAL CUES
Nifty ended on negative note at 5,278 marks losing 0.49% during the week. The Nifty April futures ended at 5,260.50 with a discount of 17.5 points. If we look at the derivatives data we can see that Nifty future prices ended in the negative territory along with decline in the cost of carry and addition of open interest, this is an indication of further short built up. Moreover, higher open interest in 5200 strikes Put indicating correction is likely in near term. For the coming week, Nifty may continue to face resistance at higher levels of 5,300 whereas on the downside support is seen at 5,180 to 5,150 levels.
The Put-Call ratio of open interest increased marginally, finally closing at 0.97 levels. The options concentration has shifted back to the 5200 strike Put option, with open interest of above 70 lakh shares.
The Volatility Index (VIX) increased and closed at 20.35 %. Market participants should be watchful at current levels as any up move in volatility index may trigger downtrend in the markets.
FIIs were net Seller in index futures to the tune of Rs 2,052.90 crore and FII index options witnessed a further rise in OI along with a net buy of Rs 1202.67 crore along with incline in PCR indicating a bearish trend.
The overall mood continues to be cautious with downward bias and the 5,300 levels for the Nifty continues to be an immediate resistance while support can be seen at 5,180 level. The upcoming corporate results and the future revenue guidance given by some of the major players will be the main cue for the market. Besides this global market will remain a crucial pointer.

OPTION CUES
During the week, most of the open interest builds up in the range of 5,200 to 5,100 Put, while, on the flip side, maximum open interest accretion was seen in 5,300 and 5400 Call. 5,200 and 5,100 strike Puts added 8.28 lakh 5.51lakh shares respectively in OI on Friday. On the Call front 5300 and 5,400 strike Calls witnessed addition of 9.36 lakh and 7.06 lakh shares in OI due to aggressive writing at these level.

OVERALL VIEW
Nifty is likely to move in a range
Nifty continued its upward move on the first trading session of the week and tested 5,320 levels. However, it faced stiff resistance at this level and corrected until 5,200 levels from where it again gained some momentum and started moving upward. It ended the week, above 5,270 mark. As of now, its MACD is about to give a buy signal by crossing above the signal line and the RSI is also giving bullish indications. As the technical indicators are supporting an upward move, it seems that Nifty can move higher initially but expected to fall later in the week on the back of profit booking. It is likely to face stiff resistance at 5,320 levels and has got a strong support at 5,200 levels. It is likely to move within a range of 5,320-5,200 in the absence of any key trigger and expected to take the cues from its global counterparts. A further upside move until 5,400 can be expected if it successfully breaches the 5,320 level. Downside, if 5,200 is breached, a move until 5,100 can be expected.

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