Monday, November 16, 2015

An oversold Put Call ratio, yet Indian markets extend losses

Indian Markets Update
·         Sensex and Nifty ended negative on Friday down by 0.99% and 0.80% respectively. Media, Metals and Engineering sectors showed weak performance.
·         CoalIndia (2.73%), PNB (2.31%) and KotakBank (2.05%) were peak gainers while Cairn (-5.46%), VEDL (-4.29%) and Cipla (-4.17) were major losers in the nifty.
·         The NSE India VIX up by 4.42% to close at 17.65 after being as high as 17.72 and as low as 15.79.
·         The SGX Nifty currently stands at 7732, down 27 pts from its previous close.

Global Markets Update
·         U.S. markets closed more than 1 percent lower Friday, pressured by a continued decline in oil prices and soft reports on the health of the consumer.
·         European markets closed sharply lower on Friday as slumping commodity prices and weak earnings reports continued to weigh on investor sentiment.
·         Asian markets were hit by a sell-off on Monday, with sentiment badly dented by Friday's brutal terrorist attacks in Paris.

Nifty Outlook
·         Nifty falls for three consecutive weeks; ends at 7762 losing 0.7%
·         Stochastic on daily chart is hovering in oversold zone.
·         Histogram on MACD is at two months low.
·         PCR is trading around 0.68 near the 2015 lows suggesting short term bounce on cards.
·         We expect the bearish momentum to fade around 7,700.
·         We remain "Neutral" at current level.
·         The crucial supports are placed at 7,715-7,600 and resistance at 7,940-8,030 for the week.

F&O Outlook
·         Open Interest addition was seen in 8000/7900 Calls and 7700/7400 Puts.
·         Unwinding was seen in 7300/7400 Calls and 7600/8000 Puts.
·         Range as defined by options chain is 7700-8200 as maximum OI concentration is placed at 8200 Calls (73 lac shares) and 7700 Puts (58 lac shares).
·         India VIX closed at 17.65 with a gain of 4.41%.MACD still remains in positive zone on weekly chart.  

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