August 1, 2020

Nifty Weekly Overview

By Roy

Nifty Weekly Overview 31st July 2020:

It was an eventful week. Some heavyweights came up with their quarterly results. On 31st July, Nifty ended lower at 11073. It closed in red for 3 successive sessions. Nifty was weak due to some profit bookings in the heavyweights like, Reliance Industries, HDFC Bank and Kotak Mahindra Bank. Pharmaceutical Companies seemed to be the talk of the town. Nifty Pharma has gained over 10% in last 4 trading sessions.

Lets us see Nifty Daily Chart:

Nifty Daily Chart

Nifty tried to give a breakout above 11300, but failed. Now it seems it will be major resistance for the coming week which will be difficult to break. Keep in mind, this is my view for the next weekly expiry, not for log term. On the downside 11000 looks like nice solid foundation. The next weekly range looks likely to be the 11000-11300 for Nifty. 200 DMA for Nifty is at around 10880, which gives a confidence that market may not opt for a sharp correction. But according to me, most good news is discounted and market is likely to trade with a negative bias.

Nifty Weekly Chart:

In the weekly chart, last candle has a big upper wick. There may be a case to revert towards mean in the longer time frame.

Nifty PE ratio is trading at all time highs around 30. It is way beyond the historical average. India Vix is trading around 24. It means market is being highly greedy. The expectations are not bothered about ground realities and price is way above the fundamentals.

My weekly Strategy:

I have sold 10650 Put option of Nifty at 15 and Sold 11500 Call option of Nifty at 11. Both for 6th August, 2020 expiry.

Disclaimer: This is not a buy and sell recommendation. I am not a SEBI registered advisor. I sell options and quite aware of the risk associated with it. I have kept surplus funds for any adjustment that may be needed due to evolving market conditions. This post is only an information not a recommendation.