IGI Logo

Bank Nifty

Bank Nifty witnessed selling pressure after forming a lifetime high in the beginning of July. The technical setup turned bearish to volatile as profit booking was witnessed from higher levels. Selling pressure intensified in the last week and it breached its strong support of 55550 levels. The index gave up its gains of the previous month and fell by over 2000 points. Price action suggests that a hold below 56000 zones could move the index lower towards 55000 then 54500 zones while on the upside, resistance can be seen at 56000 then 56500 zones.

Nifty Financial Services Index

Nifty Financial Services Index is trading within a channel and is currently hovering near the lower band of the channel. The index has been respecting its 50 DEMA with slight dips being bought into. The stochastic indicator is in its oversold zones which may suggest a halt in the downward price movement. Thus, looking at the overall chart setup we are expecting the sector to head towards 27630 and 28150 zones while on the downside support is at 25525 and 25000 levels.

Relative Rotation Graphs(RRG):

Relative rotation graphs chart shows the relative strength and momentum for group of Stocks/ Indices. It allows us to compare a security against the benchmark to see if it is outperforming or underperforming the benchmark. It is derived on Relative strength in which value of a sector is divided by the value of index mainly a benchmark which allows us to compare the performance of the sector. Relative Strength ratio is normalized to oscillate around 100 (plotted on X axis) i.e Jdk RS- Ratio along with this it provides the speed and direction of the Relative strength ratio (plotted on Y axis) i.e Jdk RS- momentum. The scatter plot is divided into four quadrants i.e Leading, Weakening quadrant, Lagging and Improving quadrant.

The analysis of sectorial RRG shows that Nifty Auto, Metal, Energy, Infra, PSU Bank, and Realty is in the leading quadrant which indicates strength going ahead. Nifty Bank is in the weakening quadrant which suggests momentum is likely to decline. Nifty FMCG is inside the lagging quadrant which shows strength and momentum both are missing. Nifty IT and Pharma are under the improving quadrant which suggests strength is low but momentum will start Improving.

Nifty Auto Index

Nifty Auto Index is consolidating between 24215 to 22945 band from the last 3 months. It is on the verge of giving a trend line breakout above 24250 zones which may start the next leg of the up move. It is perfectly respecting its 50 DEMA and momentum indicator RSI is positively placed on the weekly and monthly chart. Thus, looking at overall chart setup we are expecting the sector to head towards 25000 and 25500 zones while on the downside support is at 23300 and 22900 levels.

RRG For Nifty Auto

The analysis of RRG for the Auto Index shows that M&M, Hero Motoco, Ashokley, Bosch, Bharat Forge, and Samvardhana Motherson is in the leading quadrant which indicates strength going ahead. MRF and TVS Motors are under weakening quadrant which suggests momentum is likely to decline. Maruti, Eicher, Balkrishna, Bajaj-Auto and Tata motors are inside the lagging quadrant which shows strength and momentum both are missing. Exide and Tube Investment are under improving quadrant which suggests strength is still low but momentum will start improving.

Nifty FMCG Index

Nifty FMCG Index has been rangebound for the last 4 months and is currently hovering around its 200 DEMA. It is on the verge of a narrow range breakout above 58050. The MACD indicator has given a positive crossover which may support the upward price movement. Thus, looking at overall chart setup we are expecting the sector to head towards 58450 and 59500 zones while on the downside support is at 54000 and 53000 levels.

RRG For Nifty FMCG

The analysis of RRG for FMCG Index shows that Hindustan Unilever, Radico Khaitan, and Britannia are in the leading quadrant which indicates strength going ahead. Marico, Nestle, Tataconsumer, and Godrej consumer are under weakening quadrant which suggests momentum is likely to decline. ITC, Emami, United spirits, UBL, and Colpal are inside the lagging quadrant which shows strength and momentum both are missing. Dabur, and VBL are under improving quadrant which suggests strength is still low but momentum will start improving.

India VIX

India VIX decreased by 8.3% from 12.59 to 11.54 levels in the July series. Volatility sunk to 9.8 levels which caused some range-bound move but steamed higher towards the end.

Nifty OI V/S Price

Nifty index continued the party of the bulls in the start of the month and crossed 25600 zones but was followed by profit booking for most part of the month and slipped to 24600 levels. It observed selling pressure on every bounce indicating restricted upside. Technically, Nifty formed a bearish candle and an inside bar on monthly chart reflecting a shift in momentum. Sellers dominated for most part of the month and after four months of consecutive rally, Nifty has paused near 25600 witnessing a correction towards 24600 zones. Put Call Ratio based on Open Interest of Nifty started the series near 0.81 and oscillated in between 0.64 to 1.14 levels to finally end the series at 1.04. On option front, maximum call OI is at 26000 then 25500 strike while maximum put OI is at 24000 then 24500 strike. Call writing is seen at 25500 then 26000 strike while put writing is seen at 24000 then 24800 strike. Option data suggests a broader trading range in between 24000 to 26000 zones while an immediate range between 24300 to 25500 levels.

For More Research Reports : Click Here 

For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412