The Nifty Index ended flat at 5452.10 last week, gaining just 0.24%. On the derivative side, the Nifty Futures ended at a premium of 4.35 points. The Nifty futures prices have ended flat along with rise in the cost of carry and overall addition of open interest; which is an indication of some longs being built in it at lower levels. On Friday, buying interest on blue chips like SBI, Tata Motors etc. firmed up the Index. The same boosts up further on upbeat economic data from Germany and France that came in during the trading hours. Realty, consumer durable, banking, FMCG and oil/gas stocks led the gainers. The Sensex, ended up 93 points or 0.52% at 18,167, with 20 of its components ending in the green.
Maximum addition of open interest on the call options at strike price of 5500 & 5600 (with 81.03 & 92.46 lakh shares outstanding in open interest respectively) indicating this as the resistance zone on the upside whereas on the put options, the maximum addition of open interest at strike price of 5300 (with 1.14 crore shares outstanding) indicating it as a strong support on the downside.
Since, Q1 June 2010 corporate result season is almost over, fund flows are likely to dictate the near-term trend on the bourses. On tap at the onset of next week is data on headline inflation for July 2010. Investors will also closely watch the progress on the proposed tax reforms, such as the introduction of the Goods and Services Tax(GST) and the proposed overhaul of the Direct Tax regime. According to reports, the current monsoon session of Parliament is likely to be extended by a week.
For the coming week Nifty would continue to face resistance at its 5500 mark and a decisive crossover above this mark will only provide strength to it and in that case the next may head towards its next resistance mark of 5550/5580 whereas on the downside strong support continues to exist in the zone of 5350-5280.
FOR TODAY: Global cues turned sour last week with most markets ending sharply lower. However, the Indian markets outperformed and closed marginally higher while the broader markets gained more. This out performance could be difficult to sustain without support from global markets.
Asian Markets are trading in RED. SGX Nifty is trading at 5449 (down 9 points) and improved some points whereas it was trading in the morning at 5441.50 (down 17 points). It indicates that NIfty may open around 5448.
Today's possible trading range will be 5420-5480. First watch 5441 level; if it breaks decisively nifty future will be around 5420 where a support exits. On the upside, if nifty breaks the level of 5467-5468, we will see 5480 level.
Buy Nifty future around 5444 with strict stoploss of 5424; Some other calls will be in Comments section during trading hours.
