Technical:
Indian equities ended the week on a modest note as no technical breakout was witnessed at the end of the week. On the higher end, once again the index found resistance at the rising trendline on the weekly timeframe. The band of 11300-11400 has been acting a tough resistance zone. Daily RSI has formed a negative divergence which suggests waning bullishness and we may see serious correction in the short term. On the lower end, Nifty may drift down towards 10880, again sustained trade below 10880 may trigger further correction towards 10550. On the higher end, a decisive move beyond 11400 may induce much stronger rally.
Derivative:
Markets closed the week on a flat note as option writers took a centre stage. Nifty and Bank Nifty closed the week ~1% and ~4.5% lower, respectively, favouring the short gamma positions. Both the index future saw an unwinding of long positions during the closing part of the week, however, Nifty index managed to close above its psychological level of 11,000 for the third consecutive week. FIIs index future long/short ratio continued to trend above the 1x level for the major part of the week as FIIs gradually added long positions & reduced their short positions in the index futures. India Vix index closed the week at 21.65, down ~4%. On the options front (August 20, 2020 expiry), Nifty & Bank Nifty out of the money options added writing positions as the underlying price traded in a narrow range.
