Daily Market Strategy -- IIFL IJK Disturbing Signs – Nifty Could Slip Below 6000 Weeks after indices hit record highs, disturbing signs are emerging as far as some macro data is concerned. The Consumer Price Index (CPI) for the month of October rose to 10.09% versus 9.84% in September. The consumer food price inflation was reported at 12.56% versus 11.44% in September. The Index of Industrial Production in September rose 2%. Worries are that high food prices that the Reserve Bank of India may lift interest rates further in its December 18 policy review. The outlook is a weak start again. Investors may avoid taking large bets ahead of a holiday tomorrow. Attention would be on a host of results including ONGC, Sun Pharma, M&M, BPCL, Tata Steel and SBI. The indices could trade in a range but market participants could get nervous if the Nifty slips below the psychological mark of 6000. The rupee remains in focus as it fell for the fifth consecutive trading session, down 46 paise at 63.72 against the dollar. Nifty conclusively broke below 6,070 levels, thus puncturing the medium term uptrend. Also formation of three black crows on the daily candlestick has confirmed the bearish outlook on the markets. Immediate support for the Nifty is seen at 5,950 (50-DMA) which coincides with 61.8% retracement of the previous upmove. Nifty Support : 5921 Nifty Resistance : 6081 Bank nifty dragged broader market lower in yesterday trade. The banking index was down by 1.43% accompanied by a 8% jump in total OI suggesting short build-up. Premium in Nifty increased despite of drop to 54points vis-à-vis 42points. Option activity suggests nifty to remain range bound between 6000-6300 levels in near term. Bank nifty 11,000put witnessed OI unwinding and 11,000 call saw sharp surge in OI suggesting 11,000 may turn-out to be resistance for bank nifty for the expiry. FIIs had reduced part of their long position over the past 7 trading session. Yesterday data indicates fresh addition of short position. The current long/short ratio for FIIs in index future is now down to 3.61x (as against 6.01 on 7th Nov) . Nifty 6,200call continue to see sharp jump in OI adding 11.3lacs shares (Total OI addition in last two trading session - 23lacs shares). Nifty 5,800 and 6,000put witnessed expansion in OI by 11.3lacs and 7.4lacs shares respectively.
Posted on: Wed, 13 Nov 2013 03:26:14 +0000
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