By Rajesh Palviya
Nifty began the week on adverse note having said that shopping for momentum all through the week recovered some of the earlier losses to close in positive terrain. Nifty closed at 14823 with a achieve of 192 points on a weekly basis. On the weekly chart index has formed a bullish candle and remained restricted inside preceding week’s High-Low variety indicating lack of strength on either side. Since previous couple of months index is consolidating inside broad variety of 15000- 14200 levels representing sideways trend.
The chart pattern suggests that if Nifty crosses and sustains above 14900 levels it would witness shopping for which would lead the index towards 15000-15250 levels. Important Support for the week is about 14400-14200. Nifty is trading above 20 and 50 day SMA’s which are vital quick term moving typical, indicating positive bias in the quick term. Nifty continues to stay in an uptrend in the medium term, so shopping for on dips continues to be our preferred approach. For the week, we count on Nifty to trade in the variety of 15200-14600 with a positive bias.
The weekly strength indicator RSI is moving downwards and is quoting under its reference line indicating adverse bias. However momentum oscillator Stochastic has turned positive from the oversold zone indicating a attainable consolidation or an up-move in the close to term
Nifty derivative outlook
Nifty in existing expiry has seen Short develop up with a price tag reduce of -.42% and OI addition of 20 lac shares rising from 102.38 Lac share to 122.41 Lac shares , whilst in Banknifty also there is Short develop up with price tag reduce of -2.27% & OI addition of 1.33 lac shares rising from 13.97 Lac to 15.31 Lac shares. The sentiment indicator Computer Ratio is at present trading at 1.33 properly above the median line but nevertheless in a comfy zone indicating positive bias. In Nifty the highest OI on the Contact side in the weekly expiry scheduled 12th May is at 15,000 -15,200 & 15,500 strike, with 15,200 & 15,400 acting as a sturdy resistance wherein there has been writing of 11.34Lac shares & 8.44 Lac shares respectively. The highest OI on the Place side is at 14,500 -14,600 & 14,800 strike, with 14,500 & 14,600 acting as a sturdy assistance supplied Nifty closes & sustains under 14,800 as there has been of writing of 17.83Lac shares in the stated strike clearly indicating a sturdy assistance level.
Bank Nifty outlook
Bank Nifty began the week with a downward gap having said that quick covering along with shopping for assistance at decrease levels recovered some of the earlier losses. Bank Nifty closed at 32905 with a achieve of 123 points on a weekly basis. On the weekly chart the index has formed a little Bullish candle with shadows on either side indicating indecisiveness amongst participants concerning the path. The index is moving in a Lower Top and Lower Bottom formation on the every day chart indicating adverse bias.
The chart pattern suggests that if Bank Nifty crosses and sustains above 33500 level it would witness shopping for which would lead the index towards 34000-34300 levels. However, if the index breaks under 32500 level it would witness promoting which would take the index towards 32000-31500. Bank Nifty is now properly placed above its 20 SMA indicating positive bias in the quick term. Bank Nifty continues to stay in an uptrend in the medium term, so shopping for on dips continues to be our preferred approach. For the week, we count on Bank Nifty to trade in the variety of 34500-32500 with a positive bias.
The weekly strength indicator RSI is moving downwards and is quoting under its reference line indicating adverse bias. However momentum oscillator Stochastic has turned positive from the oversold zone indicating a attainable consolidation or an up-move in the close to term
The trend deciding level for the day is 32980 If BANKNIFTY trades above this level then we may well witness a additional rally up to 33185-33465-33675 levels. However, if BANKNIFTY trades under 32980 levels then we may well see some profit booking initiating in the marketplace, it may well appropriate up to 32700-32490-32210 levels.
Bank Nifty derivative outlook
BankNifty is obtaining highest OI on the Contact side in the weekly expiry at 33,000 -33,500 & 34,000 strike, with 34,000 acting as a sturdy resistance wherein there has been writing of 4.89Lac shares, whilst on the Place side highest OI is at 32,000 & 31,000 strike, with 33,000 acting as a pivotal level for this weekly expiry as there has been addition of 4.66Lac shares on Contact side & 4 Lac addition on Place side suggesting that any sustain move on either side of this level will choose the trend in Banknifty. IndiaVix is at present at 20.82 % and has been in downward trajectory from its current higher of 24.54% suggesting self-assurance and stability in existing marketplace trend and additional descend from these levels will augment for uptrend in marketplace.
Sector and stocks in concentrate this week
We count on Pharma, Healthcare, IT, Metal and Oil & Gas sectors to do properly in the close to term . One can concentrate on stocks like Glenmark Pharmaceuticals, Lupin, JSW Steel, MOIL, TCS, Wipro, Bharti Airtel, Adani Ports, CESC for close to term bullish trend.
(Rajesh Palviya is the Deputy Vice President – Research (Head Technical & Derivatives) at Axis Securities Limited. The views expressed are the author’s personal. Please seek the advice of your monetary advisor ahead of investing.)