Mr. Mustafa Nadeem, CEO, Epic Research
Nifty rose up on last day of the week. Nifty gained 66.85 points from previous close to close at 11634. Markets rebounded after sellers were exhausted at lower levels.
Nifty has made a classical three bar reversal pattern where it fell for first half of the week forming three black crows. In Last two sessions, Markets rebounded from lower levels and gave a classical pullback to 10 day Moving average which is quoting at 11650 Levels. Today's close also confirms the bullish structure of the overall market. Nifty successfully managed to close above the 50% of previous down swing and today's high touching the 61.8% retracement at 11655.
There is a range shift in Nifty for the current expiry. We witnessed a 3% correction in first week of September and nifty testing the lows at 11450. On the upside Major resistance comes at 11800 which can be tested in the current month. The Open Interest data suggests the same. The Current PUT-CALL ratio for Nifty comes at 1.28 and for Bank nifty at 1.32 stating that more puts are being purchased than call options. Highest Call OI of 40 Lac Contracts is built up at 11800 Levels whereas 11400 and 11500 have highest Put OI of 47 Lac contracts each. These ranges may prove to be broad range for markets. There were some short built up at 11500 strike Put Options and Short covering seen at 11800 Strike Call options.
We have some Major Data Lined up ahead next week for Indian Markets. Industrial and Manufacturing Production Figures will be released for July Month which may decline a bit. We have Inflation numbers for Aug Month next week which will be higher owing to Higher crude Prices.
The fall in Indian Rupee against Dollar is though attributed to external factors but it does worry the investors as our current account Deficit may widen. We'll have that Data next week as well. We also haven't seen any aggressive intervention by RBI. Nifty will consolidate next week before any fresh breakout on either side defining the short term trend.