Technical
The Nifty ended the session with a weekly gain as the bullishness continued in the second week. On the daily chart, the index has moved above previous swing high, which is a bullish set up. However, the index value failed to move above (10552) 61.8% retracement level, which is a crucial reversal point. The weekly RSI is in bullish crossover and rising. Going forward, Nifty may continue to face stiff resistance at 10552. A decisive move beyond 10552 may induce much stronger rally in the market whereas failure to move above the said resistance may trigger a serious correction.
Derivative
Markets witnessed heavy volatility throughout the week as across the board buying frenzy in the broader markets weighed in. Nifty & Bank Nifty index closed the week ~1.5% higher, with IT stocks opening the July series on a stellar note. Both the index futures added fresh long positions during the closing part of the week, indicating a positive bias. FIIs index future long/short ratio opened the July series at 0.7x level, favouring the bears. India Vix index closed the week at 28.5, down ~5%. On the options front (July 02, 2020 expiry), Nifty 10,500CE is the maximum open interest strike, carrying short positions, hence a break above the recent high of ~10,550 could lead to a sharp move in the underlying index on account of short covering.
