Weekly Outlook Indian Stock Market (21 Jun - 25 Jun)

WEEKLY TECHNICALS
High: 5302.30
Low: 5120.15
Close: 5262.60
Change: +143.25
RSI (14 Days): 57.20
Pivot: 5235
Support: 5168, 5073
Resistance: 5330, 5397

TECHNICAL CUES
Nifty ended the week on positive note at 5,262.60 marks gaining more than 2.80%, the Nifty Futures (June) closed at a discount of 4.65 points. On the derivatives front we can see that the Nifty ended in positive territory along with an overall addition of open interest and with negative cost of carry, this is an indication of closure of long poison at higher levels. For the coming week an immediate support for Nifty is seen in the zone of 5,150-5,180, whereas on the upside resistance is seen in at 5,300-5,320 mark.

• The Put-Call ratio of open interest increased to 1.20 levels. The options concentration has seen at 5,000 - 5,200 strikes put option.
• The Volatility Index (VIX) decreased significantly during the week and closed at 19.96%. We may see higher volatility next week due to F&O Expiry.
• FIIs were net buyer in index futures to the tune of Rs 4,377.51 crore indicating an uptrend in market and in the options index FII witnessed a further incline in OI along with a net buy of Rs 598.65 crore with higher PCR is indicating some profit booking in near term.

Nifty is expected to remain in the range of 5,300-5,150 and only a breach on the downside will push the index to lower levels. The move may remain mixed, with selling pressure near 5,300 levels. Any instability on the global front will bring about selling pressure from current levels. 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 5,000 -5,200 PUT while, on the flip side, maximum open interest accretion was seen in 5,200 - 5,300 CALL. 5,200 and 5,300 strike put added 7.08 lakh and 2.88 lakh shares respectively in OI on Friday. On the Call front 5,300 strike Calls witnessed addition of 3.69 lakh shares in OI due to call writing at this level.

GOLD
Gold prices started the week on a mixed note. Prices were highly volatile but managed to stay high due to a weak dollar. Prices were moving in a narrow range and touched a record high after seeing the largest daily rise towards the end of the week. Concern over the impact of the euro zone debt crisis and downbeat US data encouraged a fresh sweep into safe-haven assets like gold which helped the prices to pick up. Gold prices rose in the domestic market also in line with the firming global trend in the yellow metal. Domestic prices rose due to favorable global cues but the demand for the metal back home remained weak due to the seasonally lean period. Gold prices may see a modest rise as the investors may divert funds towards gold due to the sluggish US economic data and on concern that the economic recovery may be weaker than expected.

OVERALL VIEW
Nifty remain range bound between 5,200 to 5,300
Nifty continued its upside journey this week too. Nifty managed to breach three psychological marks decisively this week, first 5,000 then 5,100 and finally 5200. Though Nifty has also managed to cross 5,300 but for short while only and could able sustain above that. RSI (14 Days) is currently moving in neutral territory at 62 just below 70 indicates there is scope of further upside. MACD is showing positive divergence and on the verge crossing neutral line from below indicates strength of Nifty. However Stochastic Oscillator is currently moving in positive territory above 80 and showing negative divergence which points towards correction in Nifty from existing high. Nifty is trading above 5 day EWMA, till the time its trade above this not expecting any major correction. Any decisive close below 5 day EWMA could drag Nifty upto 5,138 mark which is its 13 day EWMA. Nifty is currently facing stiff resistance at 5,300 if this level breached decisively then we could see rally upto 5,380 mark. Strong support for Nifty seems at 5,200. Expecting Nifty to remain range bound in between 5200 and 5,300 in short term. Nifty is likely to move in tandem with its global counterparts and would remain depended on them for any major breakthrough on either side.

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