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    India VIX eyed! 17,500 possible in October series if Nifty defends 16,700: Kavita Jain

    Synopsis

    "In the monetary policy, RBI has given an optimistic stance on rupee depreciation. In the period 1 st April to 28 Sep, while US Dollar appreciated by 14.5% and the Indian rupee depreciated in a very orderly manner by 7.4%. In the coming week, the Indian currency may also find support from a fall in the dollar index. The RBI is encouraging state-run refiners to reduce dollar buying in the spot market to contain a sharp fall in the rupee."

    Kavita Jain-Arihat-1200ETMarkets.com
    “If India VIX cool down below 18 and the index successfully defends its 16700 level in October series, it will retest 17500 levels," says Kavita Jain, Learning Head & Sr. Research Analyst at Arihant Capital Markets Ltd.

    In an interview with ETMarkets, Jain, said: “In case of a breakdown below 16700, 16500-16480 levels will act as good support level as buying opportunity” Edited excerpts:


    You might want to call this a Fed effect. Indian market fell by about 2% in the week gone by. What led to the price action?
    Yes, that was an extremely eventful week for the markets with so many global events bearing heavily on them.

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    The Reserve Bank of India (RBI) hiked the repo rate by 50bps to 5.9%. This was in line with market expectations and the market cheered up in green colour where the Nifty closed higher by about 1.6 per cent and Bank Nifty closed up by 2.6 per cent on Friday.

    It seems that the market is celebrating the auspicious green day of Navratri. However, on weekly basis, the Nifty closed lower by 1.3 per cent and Bank Nifty was down by 2.3 per cent.

    Post the September series expiry – where do you see markets moving in the October series?
    After the painful September series, the beginning of the October series is initiated on a positive note on Friday’s trading session.

    On a derivative OI Analysis -- Highest OI PE is at 16000 Strike followed by 17000 Strike and 18000 CE followed by 17500. India VIX has cooldown by 6.24% in Friday’s trading session.

    On a technical side, Nifty took support on 61% retracement of the last 4 months' uptrend. On the upside, it may face supply pressure of downward sloping averages placed on 17216 – 10-Days EMA & 17379 which is 20-Days EMA.

    However, if India VIX cools down below 18 and the index successfully defends its 16700 level in the October series, it will retest 17500 levels.

    In case of breakdown, 16500-16480 levels will act as good support levels as buying opportunities.

    Rupee took a hit in the week gone by. Where do you see the currency headed in the coming week?
    In the monetary policy, RBI has given an optimistic stance on rupee depreciation. In the period 1 st April to 28 Sep, while US Dollar appreciated by 14.5% and the Indian rupee depreciated in a very orderly manner by 7.4%.

    In the coming week, the Indian currency may also find support from a fall in the dollar index. The RBI is encouraging state-run refiners to reduce dollar buying in the spot market to contain a sharp fall in the rupee.

    After a massive rally in USD/INR prices, the market is expecting some pullback for the support range of 80.80-80.30.

    Level 82.00 will act as a major resistance level above it, if prices sustain above it then an upside rally may continue for the targets of 83-85 levels in upcoming trading sessions.

    What is the texture of the market – buy on dips or sell on rally kind of market?
    Market seems to be traded in consolidation range of 16500 -17500 as base 1 and on broader outlook 16000-18000 as base 2 where one can take support levels as buying opportunity and resistances as profit booking/shorting.

    FIIs have also turned net sellers in the cash segment of Indian equity markets. Will the trend continue in October?
    With the global uncertainties & interest rate hikes FII’s are selling in all the emerging markets. The trend may remain mixed in the October series.

    Utilities, power, metal fell the most. What led to the price action?
    The Nifty Metal index is at the 5768 level and has witnessed selling pressure from the horizontal resistance level of 6300. It has good support levels which are 3-4% down from current level.

    These are at 5575-5535 which is 38 % retracement of the last uptrend on the weekly chart and 50-Weeks EMA respectively from where we can expect a bounce back.

    Power and utility counters are in supply pressure on charts. However, in Friday’s trading session we could see a pullback from the oversold territory but sustainability on upper levels is important.

    A lot of stocks are trading at a 20-50% discount to their 52-week highs after the recent fall. What is the checklist one should follow while buying the dip?
    Quality stocks that intact their uptrend on the larger time frame and give better risk-reward opportunities should be picked as buying opportunities.

    Defensive counters or stocks that have a lesser impact on them due to global uncertainties should be on the checklist.

    After a sharp correction from a high of 298, India Cement is again picking its momentum and has bounced from its previous horizontal support and 10WEMA with good volume. With the stop loss of 258, one can take short-term trade for the price target of 295/300

    Investors can look at HFCL trading currently at CMP of 72.82 with a stop loss of 68 for the price target of 95/100. It is expected to get benefited from 5G.

    The counter is taking support at its 50 WEMA. Above 75 Level it will regain its all-important daily moving averages.

    Looking at the festivities and technical structures Indian Hotel, ABFRL, and Titan will be on the radar for a trading opportunity.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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