The previous week the market was highly volatile, the Hong Kong index, Hang Seng fell nearly 10% due to the rise in new delta variant COVID cases but it recovered and finally and closed 5% lower. This created a ripple effect in the global markets and it was also reflected in the Indian market. Finally, Nifty 50 closed 0.59% down.
FII's are on a selling spree, they have sold for Rs.23,193 crores in July. The DII's are supporting the market and they have bought for Rs.18,393 crores in July. The high mutual fund inflows might be a reason. FII's must stop selling for Nifty to cross the 16,000 mark. Currently, FII's are 62% long and 38% short in the index; 53% long and 47% short in stocks.
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This week we must look into the PMI data, auto sales data, cement sales data, RBI monetary policy and the US jobs data. As there are no lockdowns in most of the states the auto sales data may be good. The cement sales data is also expected to be good. The RBI is likely to keep the repo rate unchanged.
Nifty is consolidating for more than a month after it crossed the 15,700 and 15,800 levels. As soon as nifty touches 15,900 there is heavy selling and when it's near 15,500 or 15,600 huge buying is seen. So, Nifty has to close above 16,000 for any upside move and close below 15,500 for any downside move, till then we can be neither bullish nor bearish and expect a range-bound move.
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(chart from www.tradingview.com)
In Nifty, 16,000 has the highest open interest on the call side and on the put side, the 15,000 has the highest open interest in the August month expiry. In the current week expiry, the 16,000 call and 15,700; 15,500 and 15,000 puts are having huge open interests.
In Nifty Bank, 35,000; 36,000 have the highest open interest on the call side and on the put side, the 34,000; 33,000 have the highest open interest in the August month expiry. In the current week expiry, the highest open interest is at 35,000 on the call side and 34,500 and 34,000 on the put side.
The VIX is very low so the option premiums are also very low. Currently, the PCR of Nifty is 1.28.
Global markets are slightly negative but SGX Nifty is positive. Stock-specific actions may be there this week due to the Q1 results.
4 IPOs are coming this week, Devyani International, Exxaro Tiles, Krsnaa Diagnostics and Windlas Biotech. All four will be open for subscription from 4th to 6th August.
Finally to conclude,
- Nifty will cross 16,000 only when FII's stop selling and this may not happen this week.
- We can expect a range-bound movement this week also.
- Nifty 50 may trade between 15,500 and 16,000.
- The RBI monetary policy and US jobs data might create some volatility towards the end of the week.
- Markets are volatile and at any time there can be a 300 points upside or downside move.
- Any fall towards 15,500 will be a good buying opportunity.
You can check the FII long and short data, FII DII net sales, open interest data, Global markets data, on the "Quick Bites" page. Click here and check now.
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