For the weekend  07th Aug'20-Friday... Updated on 02.08.20, Sunday : 9.06 am

Last week Nifty trend: Nifty Index as expected and wriiten opened with a positive note at 11225, made a high also at 11225 thereafter, mild profit booking dragged till 11087 on Monday, then the Index moved up once again till 11341.40 on wednesday, further the sell-off cum profit booking dragged the Index till 11026.65 on Friday, ended the week at 11073.45 with a weekly loss by 120.70 points i.e.,1.08%.

As written in the last week outlook, the Index tested almost our threshold resistance band i.e, 11330-11375, peaked till 11341.40, though it tried twice to surpass these level, but unable to sustain at the higher levels, as expected the profit booking cum sell-off till our threshold support band i.e, 11055-11030 and closed the week well below 11280-11240, by breaking the continuous six weeks winning streak and closed the week with a negative bias.

This week Nifty Trend: Nifty index may open on Monday i.e., 03rd Aug'20, with flat to negative note to test 11030-10990, if able to open, surpass and sustain below 10990 then, the immediate support lies at 10895-10800-10750-10660-10560 levels. On the other hand, the immediate resistance seen at 11150-11240, any rally above 11240 then, the Index may test 11285-11340-11375-11440-11530-11620 levels.

Special Mention: This week, the important event is the RBI Policy meet which is slated on 06th Aug'20-Thursday, this is the key event to watch out the outcome. Further, the India Inc., Q1-June'20 remaining results are also plays an important role in the Nifty index movement, the front runners around 313 companies already announced their results as on 01st Aug'20, the Net profit witnessed a decline by 12.50% on QoQ basis if, the decline rate moves further then, the Index may witness more selling pressure since, the Price Earnings-PE ratio already peaked to the all time high 30.20 times, hence please be very cautious this week.

By considering the above facts, the Index will try to take support 11030-10990-10900 band to consolidate further with downward bias, any close below 11030-10990, the weakness may drag the index till 10800-10560 levels in the near term. At the same time, 11280-11340-11375 will act a strong hurdles to move above, if the Index able to close above 11340-11375, then it may test 11440-11530-11630 levels in the ensuing weeks.

Sector wise performance: Last week, mostly Pharma sector (+8.90%) and IT sector (+4.55%), helped the Nifty Index to peak to the higher levels, but banking sector (-4.51%) and Reliance Industries (-3.68%) dragged the Index to the lower levels.

Institutional Investors trading data: The Foreign Institutional Investors-FII's last week bought marginally to the tune of Rs.262.66 crores on the net basis whereas, the Domestic Institutional Investors-DII's, sold almost every day except on Friday to the tune of Rs. 2445.41 crores on the net basis in the equity segment, this being a major reason, coupled with selling more pressure at the higher levels dragged the Nifty Index to the lower levels. 

Tading Strategy: The Investor/trader may exercise due caution, especially this week at the higher levels i.e 11280-11340-11375 if moves once again and not able to close above 11340-11375 levels, to exit the position, if any and invest again in the equity segment especially in the Nifty 50 stocks, when the Nifty Index comes near 10850-10700-10560 levels, for a short term gain around 10-15%. This is a traders market, to trade for short term gains, rather to wait for long term basis.

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