Weekly Market Outlook for 7 August to 11 August

The week gone by was a choppy week for the market as the Nifty corrected due to volatility in the global markets and sneaked below 19300 mark on the weekly expiry day. However, we witnessed some recovery from the lower levels and the index managed to end the week above 19500 with a weekly loss of two-third of a percent.

Nifty Today:

Our markets have seen some corrective phase form the last couple of weeks as the global news flows too have not been much favorable for the equity markets. In last four months, our markets had rallied mainly because of buying from the FII’s in the cash segment and in the index futures segment too; they had traded with a positive bias during the last series. However, they rolled over only 58 percent of their long positions in the August series and post that they have further lightened up longs and formed fresh short positions as well. Their ‘Long Short Ratio’ has reduced to just 40 percent which means they have about 60 percent positions on the short side. Also, the INR has depreciated and is approaching the 83 mark which is an important resistance. This negative data has led to the correction but technically, this correction just seems to be a corrective phase within a broader uptrend as the broader markets have not witnessed any significant sell off and stock specific buying interest could still be seen. Hence, we expect the markets to remain choppy for some time and do not expect a momentum like we had seen in last couple of months. The immediate supports for Nifty are placed around 19290 and 19220 where we can see the 40 DEMA support and the 23.6 percent retracement of the entire four months upmove. Whereas on the higher side, 19650-19730 would be seen as the resistance range on pullback moves.

      Market recovers from mid-week lows, choppiness likely to continue

Markets are expected to remain choppy within this range and hence, traders are advised to be stock specific in the coming week. One should keep a close tab on the global developments as well along with the INR which would be crucial. Traders are advised to look to lighten up longs on pullback moves in the resistance zone and look for buying interest on dips near supports.

Nifty, Bank Nifty Levels and  FINNIFTY Levels:

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