For the weekend 20th Aug'21-Friday... Updated on 15.08.21, Sunday-6.03 pm

Last week Nifty trend: Nifty Index last week, opened on a positive note at 16281.35; on Tuesday, it made a high 16359.25, thereafter it moved down on Wednesday till 16162.55 further, it moved up till 16543.60 on Friday and closed the week at 16529.10 on a positive note with a weekly gain 290.90 points i.e., 1.79%. 

Sector wise performance: Last week, the major sectoral indices have given mixed performance, on the positive side, the Nifty IT was leading with a weekly gain by 4.39%, followed by the Nifty Energy gained 1.37%, Nifty Financial Services gained 1.25%, Nifty Bank gained 1.01% finally, the FMCG gained marginally by 0.47%. On the other hand, the Nifty Pharma lost by -3.23%, followed by the Nifty Realty lost -2.21%, Nifty Metal lost  -0.72% and Nifty Auto lost -0.69%. Likewise, Nifty Midcap Index closed on a negative note with a weekly loss  -1.24%; as well as, the Nifty Smallcap Index also, closed with a weekly loss -2.20%. 

Institutional Investors trading data: The Foreign Institutional Investors-FII's last week, continued as a net buyer in the Equity segment, this week they bought to the tune of Rs.3879.20 crore on the net basis; as well as, the Domestic Institutional Investors-DII's, continued as a net buyer, they bought to the tune of Rs.636.38 crore on the net basis, as per the data forwarded to the SEBI, we must watch the FIIs/FPIs behaviour this week, whether they continue the funds inflow or not.

USD Vs INR: The USD Vs INR opened near $74.43, made a weekly high at $74.50 on Tuesday; thereafter, it moved down and made a weekly low till $74.08 on Wedensday further, it moved up once again till $74.42 and closed the week with a negative note at $74.21, This week, the USD Vs INR should move above $74.24-74.38 if moves and sustain above $74.38 then, the USD may re-test $74.41-74.49-74.61-74.69-74.74-74-80-74.87-74.97-75.09 levels. On the other hand, if the USD moves below $74.21-74.16 then, it may re-visit $74.08-74.04-73.97-73.92-73.82-73.75 in the near term. 

Key Events: No major key events are expected this week on the global front; as well as on the domestic front, except the Indian WPI Inflation data is expected this week on 16th Aug-Monday, remaining India Inc. Q1(Apr-Jun'21) corporate results and Covid third wave developments, we must watch this week. 

Q1-2021-2022 Earnings: The India Inc. Q1(Apr-Jun'21) corporate results, so far 3258 out of 4248 companies were declared their Q1 results, on a QoQ basis the Net profit seen a drop and moved to the negative zone by -15.40% when compared with last quarter i.e, the Net Profit of these 3258 companies were at Rs.203,313.80 crore, as against in the Q4 (Jan-Mar'21) the Net profit seen Rs.171,977.40 crore. On the other hand, on a YoY basis, the Net profit seen positive growth about 397.20%, last year these 3258 companies made a Net profit Rs.34,588.80 crore. Till last week, almost all major corporate companies declared their Q1(2021-2022) results, this week the rest of the midcap/small cap sector companies will declare their Q1 numbers.

Covid19: The Covid-19 second wave has continuously been witnessed declining trend, as of today the country witnessed everyday covid positive below 40k mark, the number of active cases now at 385,336 the death toll rose to 431,225 the daily death rate moved down below 500 in a day. We will have to wait and see the further developments, the lockdown relaxation already started, if the daily positive numbers are down steadily, may be from this month, the normalcy may return, subject to the vaccination drive happens in a full swing (as on date, the vaccination status stands at 54.38 crore) and the third wave of the covid19.  

Crude Oil: Crude Oil price has moved up from $65.10 to $69.50 per barrel and hovering around $67-68, the domestic Petrol & Diesel prices continued to sell above Rs.102 mark without any major changes in the last 27 days, since the International Crude price is steady at $68, the recent OPEC Meet, the OPEC countries agreed to increase the production from Aug to Dec'21 by a further 2 billion bpd or 0.40 bpd a month, this decision has dragged down once again the Crude Oil price to $65 per barrel.

Price Earnings: The price valuation i.e, Price Earnings ratio-PE, has maintained the same last week level i.e., 26.51 times, also settled on Friday at 26.51 times. The lower PE valuation around 26 times, is due to the Nifty50 stocks Q4 good numbers when compared with last year at the same quarter.  

Advance & Decline (ADR) Ratio & Average Daily Volume(ADV): Market breadth, in the overall NSE listed stocks, last week seen in a negative zone, out of 2051 stocks were traded daily on an average basis, 4231 stocks were advanced and 5753 stocks were declined, the ADR maintained 0.74 times. At the same time, in Nifty50 stocks, the ADR has been maintained on the positive zone at 1.04 times with 127 advances and 122 declines, this data infers that, the value buy seen in Nifty50, especially in the Nifty IT stocks rather than NSE listed stocks, this was evident by the ADV(Average Daily Volume) stood at Rs.60,340.32 crore for the overall NSE stocks and Nifty50 stocks, stood at Rs.21,384.04 crore.

F&O Cues & PCR (Put/Call Ratio): The Nifty future was settled at a discount by -11.75 points from the last week premium level 13.50 points, the Nifty Futures Open Interest-OI as of Friday at 13647700 i.e.,272954 lots, when compared with the last week level 12316750 i.e., 246335 lots. The PCR(Put/Call Ratio) has come down from 0.93 to 0.87, the maximum open interest seen in 16400 PUT option and 16700 CALL, it indicates this week, the Nifty may take support 16400 levels and 16700 levels may act as a strong resistance.

This week Nifty Trend:  Nifty Index continued the up trend, after it has broken 15962 levels on 03rd Aug-Tuesday, the strong buying support by the FIIs & DIIs, helped the Nifty Index to test 16543.60 and closed well above our threshold support levels i.e,,16225. By considering the above mentioned micro, macro data and other factors, I conclude the weekly outlook that, the Nifty Index on Monday may open on the positive bias to test 16550-16590 if, moves above 16590  then, it may try to test till 16645-16710-16800-16850 levels in the near term. On the other hand, any weakness at 16545-16465 levels, may drag the Index once again to re-visit till 16310-16225-16165-16060-15965 levels. It looks, the trading range shifted to 16000-16700 for some more weeks, a sharp and minor correction is possible any time till 16000-15965 levels, trade with due caution at the higher levels.  

Trading Strategy: The Investor/trader those who invested near 15600-15500, may book profit till 16545-16700 and wait for a further dip to re-invest in the Nifty50 stocks, again at Nifty Index levels 16200-15965 levels with a short term perspective to gain 5-15%.

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