After touching new high, markets are under profit booking zone and the volatility in the market likely to continue due to weak global sentiments. However, stock-specific activity may dominate the trade as a number of companies will be announcing their first quarter results. Going ahead, progress of monsoon, trend in global markets and trend in investment by FIIs will decide the next direction of the market.
Technical Outlook for CNX Nifty
For third successive month, the benchmark index, CNX Nifty managed to gain nearly one & half percent and formed a new life-time high at 7840.95. It was not an easy month for participants as we saw excessive volatility across the board.
On daily charts, we are seeing index forming a broadening formation which can act as both reversal & continuation pattern. Also, there’s strong negative divergence between the price chart and RSI oscillator, which indicates loss of momentum which finally leads to reversal. Broadly, we expect it to consolidate in a range of 7400-7900 in August and either side breakout would trigger the next directional move.
Nifty July rollover was lower at 68% compared to last month of 71% as banking stocks witnessed low rollovers at 58% with weakness in PSU banking stocks in the current expiry. Total rollover of 81% (6m-avg 79%) with the rollover cost in nifty futures traded at a premium of 35-40 points between the two months. PCR at the start of the month is at 0.90 as there are no sufficient positions in calls or puts OI in the current expiry. India VIX has closed at the bottom of the range and it is likely to move up with the events and result season.
The sectors witnessing strong roll overs are Realty, Capital goods, Pharma and Consumer sectors while weak rollovers were in Automobiles, Telecom, Infrastructure and Cement sectors. Among the individual stock with high roll overs were Abirlanuvo, Jubilant Foods, Titan and Aurobindho while stocks like M&M, Sun TV, Exide Industries had weak rollovers.