For the weekend  21st Aug'20-Friday... Updated on 16.08.20, Sunday : 10.14 am

Last week Nifty trend: Nifty Index as expected and wriiten last week, opened with positive note beyond our resistance band i.e, 11240-11255, made a open at 11270.25 thereafter, it peaked till 11373.60 on Tuesday then. the Index was consolidating between 11350-11250 and got sold-off on Friday till 11111.45 and closed the week at 11178.40 with a marginal loss by 35.65 points i.e.,0.32%. As written in the last week outlook, the Index tested our threshold resistance level 11375 and unable to surpass, close above this level, the weakness cum profit booking dragged till our support band i.e, 11125-11060. 

Key Events: This week no major key events are expected either in the domestic front or in the global front, the Govt of India, on 11th Aug'20 released the Index of Industrial Production-IIP numbers for the unpublished months such as April to Jun'20, the numbers are as follows: In Apr'20, the IIP stood at -57.60, May'20 it was -33.90 and Jun'20 it was -16.60, the numbers infers that the production cycle slowly improving, may be in couple of months it may reach to the positive territory. The India Inc., Q1-June'20 remaining results are also plays an important role in the Nifty index further movement, the front runners around 1345 out of 4268 companies already, announced their results as on 15th Aug'20, the Net profit witnessed a decline by -7.34% on QoQ and -56.50% on YoY basis, if the decline rate moves up further then, the Index may witness more selling pressure at the higher levels since, the current Price Earnings-PE is already peaked to the all time high 31.42 times, as on Thursday and started to move down on Friday. 

This week Nifty Trend: By considering the above facts, the Nifty index may open on Monday i.e., 17th Aug'20, on a positiive note with gap up (subject to the Asian market move) to test 11210-11260, if able to open, surpass and sustain above 11260 then, the immediate resistance seen at 11290-11340-11375-11435-11535-11625 levels. On the other hand, the immediate support lies at 11111-11070-11040 any weakness below 11040 then, the Index may re-test 10995-10940-10890-10825-10770-10560 levels.

Special Mention: Last week, in our special mention note, I clearly mentioned that unless, the Nifty Index surpass above 11375 and closes above 11340 then, the weakness may drag the Index till 11060, on Friday the Index tested 11111, we must watch this week on opening move to re-test 11260-11375 levels once again, if the Index able to surpass and close above 11340-11375 then, it may test 11435-11535-11620-11750 in the near term and it may try to fill the first gap down level made from 11536.70 on 27th Feb'20. At the same time, any further sell-off is possible only if, the Index break 11111-11040 levels this week and close below 11040 then, it may re-test 10990-10880-10750-10675-10560 levels in the ensuing weeks. 

Sector wise performance: Last week, Nifty Metal Index ganied (+3.95%), Nifty Pharma gained (+2.71%) and Nifty Auto sector gained(+1.63%) helped the Nifty Index to test 11375 and hold the same at 1111 levels further the banking sector, Nifty Energy Index and Nifty FMCG sector lost the momentum and closed with a negative note. Nifty FMCG lost -0.80%, Nifty Energy lost -0.67% and Nifty Bank closed with -0.34%.

Institutional Investors trading data: The Foreign Institutional Investors-FII's last week bought to the tune of Rs.2130.36 crores on the net basis whereas, the Domestic Institutional Investors-DII's, sold every day to the tune of Rs.4420.72 crores on the net basis in the equity segment, this being a major reason coupled with no convincing move with volume, not happened at the higher level i.e, 11375, dragged the Index to close in a flat to negative note by erasing all the gains, in a single trading session i.e., on Friday till 11111. 

Tading Strategy: The Investor/trader may exercise due caution, especially this week at the higher levels i.e 11340-11375 if test once again near 11300-11375 and not moves and close above 11340-11375 levels this week, to exit the position and invest again in the equity segment especially in the Nifty 50 stocks, when the Nifty Index comes near 10900-10560 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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Wishing you for a safe and secured with profitable trading.