Technical
The Nifty ended the session with a weekly gain on the board registering 4th winning streak in a row. On the daily chart, the index has moved above previous swing high, which is a bullish set up. In addition, the index value has move above (10552) 61.8% retracement level, which was a crucial reversal point. The trend is expected to remain bullish as long as Nifty sustains above 10552. The weekly RSI is in bullish crossover and rising. Going forward, Nifty may continue to move higher. Next crucial resistance is placed at 10850-11000. A decisive move beyond 11000 may induce much stronger rally. On the flip side move beyond 10550 may trigger trend reversal.
Derivative
Markets continued to trend higher as the benchmark index Nifty retraced back ~65% of its entire fall from the highs of 12,430 to the lows of 7,511 seen during the month of March. Bank Nifty outperformed the Nifty index by ~1% with both the indices closing the week ~1.5%/~2.5% higher. Both the index future added fresh long positions during the week, however marginal hint of profit booking was seen during the Friday’s trading session. FIIs index future long/short ratio surged to 2x level as FII’s gradually reduced their short positions and added fresh long positions in the index futures. India vix index closed the week at 24.8, down ~3.5%. On the options front (July 16, 2020 expiry), Nifty and Bank Nifty out of the money options added writing positions as the underlying price surged traded in a narrow trading band.
