NIFTY View

NIFTY: Week 12th August and Ahead

Another small week ahead for the markets next week as we celebrate I-Day on 15th August and so have just 4 trading sessions. We are short on NIFTY futures and have no positions in options as the premiums will now be eaten up.
NIFTY
The options data suggests that bulls have built up strong supports at 5500 and 5400 levels. 5400 won't break in August expiry in the current scenario. Also, there seems to be a short covering on the cards for Nifty which could take it to 5700-5800 zone. Anything above that doesn't seem possible now. So the range for the remaining sessions of august series will be 5400-5800, for the next week the 5500-5700 zone will be the range. Any break above these levels will create new movements. There are talks of 5300,5200 and even 4800 doing rounds in the market. Many are even buying 5000PE and all but that will just be a big money losing strategy. As we had said last week, 5500 is a very strong support on the daily, weekly and monthly charts. Now added to this is the options data which again suggests an upmove till 5700 levels and even 5800 levels. Till then, market is a sell on rise. Bank Nifty has given a very big fall and the correction on bank nifty will be greater than nifty. So buying BNF calls could be a good strategy next week. Avoid extreme OTM options as even with wild swings, they will give meager gains and bigger losses. BNF can be bought with SL at 9700 and targets at 10,000 and 10200.

BankNifty - Daily Chart
Last month, we had said that the pharma and FMCG sectors were over valued and expensive and it's better to avoid them. We had posted about Lupin forming a reversal pattern from where a big fall, big recovery and a bigger fall came. The CNX FMCG index has fallen from 19500 levels to 16500 levels in just 3 weeks! 
CNX FMCG-Weekly
The chart of the CNX FMCG on weekly TF shows that the index is near a crucial 34weekMA support and after a 3000 pint fall, some recovery should be seen. Keep an eye on ITC, Dabur as they could give bullish upmoves in the next 2 weeks. Avoid HUL thought the movement will be bigger in it. 
CNX PHARMA - Weekly
The weekly chart of the CNX Pharma too shows supports and some kind of a bounce back can be seen in pharma sector as well although 3%-4% downsides can be possible too in the next 2-3 weeks. Lupin, Sun Pharma and Aurobindo can give good trades going forward.
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