Weekly Outlook Indian Stock Market (14 Jun - 18 Jun)

WEEKLY TECHNICALS
High: 5139.05
Low: 4967.30
Close: 5119.35
Change: -16.15
RSI (14 Days): 51.61
Pivot: 5075
Support: 5011, 4903
Resistance: 5183, 5247

TECHNICAL CUES
Nifty ended the week on a flat note at 5,119.35 marks losing marginally 0.31%. The Nifty Futures (June) closed at a discount of 5.70 points. On the derivatives front we can see that the Nifty ended in negative territory along with an overall addition of open interest and with negative cost of carry, this is an indication of shorts being built at higher levels. For the coming week immediate Support for Nifty is seen in the zone of 5,020-4,960, whereas on the upside Resistance is seen in at 5,150-5,180 mark.

• The Put-Call ratio of open interest decreased during mid of the week due to squaring off position but at the end again it surged to close at 1.16 levels. The options concentration has seen at 5,100 – 5,000 strikes Put option.
• The Volatility Index (VIX) increased during the week and closed at 24.79%. If VIX increases from current level, then Nifty will see downsides. Volatility has a strong inverse correlation with markets.
• FIIs were net seller in index futures to the tune of Rs 926.32 crore indicating a slightly negative trend in market and in the options index FII witnessed a further incline in OI along with a net buy of Rs 4,183 crore with higher PCR is also indicating downtrend in market.

The overall mood continues to be cautious with mixed trend. The Nifty is expected to remain in the range of 4,960- 5,180 and only a breach below or above this range will decide the next direction of the market. Although the domestic market has handsomely weathered the global storm, the going ahead may be choppy. Investors will eye the first installment of the corporate advance tax payment data and monthly inflation data. The progress of the monsoon will also be keenly watched. However, global risk appetite holds key for Indian equities in near term.

OPTION CUES
During the week, most of the open interest builds up in the range of 5100 -5,000 Put while, on the flip side, maximum open interest accretion was seen in 5,200 – 5,300 Call as aggressive Call writing witnessed at these level. 5,100 and 5,000 strike Put added 5.66 lakh and 8.98 lakh shares respectively in OI on Friday. On the Call front 5,100 and 5200 strike Calls witnessed addition of 6.04 lakh and 6.42 lakh shares respectively in OI.

OVERALL VIEW
Nifty is likely to face stiff resistance near 5,150-5,180 level which is very close to 61% Fibonacci retracement
Nifty swayed within a broad range, plummeting and then bouncing back with increased strength. The markets started off on a subdued note broke major support level 5,000 before recovering smartly for the week. Buying at lower level was fuelled by improving global sentiment as the index crossed the 5,100 levels by the weekend. Technically Fibonacci retracement suggests that Nifty could face stiff resistance in the range of 5150-5180, which is very close to 61% Fibonacci retracement level. MACD indicator had a positive crossing and still trading the zero line mark, is indicating some feebleness. Now 5150-5180 would be the strong resistance level to be watched in the coming trading sessions and moreover the presence of 50 DMA would be adding the significance of those levels. A upside breaching of those levels can carry index to the multiple resistance zone of 5,220.Towards downside the major supports would be 5,020-4,960.

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