By Rajesh Palviya
Nifty closed at 15175 with a acquire of 498 points on a weekly basis. On the weekly chart the index has formed a lengthy bullish candle forming larger High-low compared to prior week and has closed above prior week’s higher indicating positive bias. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart indicating positive bias. The chart pattern suggests that if Nifty crosses and sustains above 15200 level it would witness acquiring which would lead the index towards 15350-15500 levels. Important Support for the week is about 14850-14700. Nifty is now effectively placed above its one hundred SMA indicating positive bias in the quick term. Nifty continues to stay in an uptrend in the medium term, so acquiring on dips continues to be our preferred approach. For the week, we count on Nifty to trade in the variety of 15500-14850 with a positive bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have each turned positive and are above their respective reference lines indicating positive bias.
Nifty derivative outlook
Nifty futures witnessed reduce of open interest by -11.35% shedding of 12.72Lac shares with a value gains of 3.34% indicating Short Covering. The sentiment indicator Computer Ratio is at the moment trading at 1.38, growing from 1.11 of last week indicating a positive bias in the market place with caution at larger levels. In Nifty the higher OI on the Contact side in the month-to-month expiry scheduled 27th May is at 15,200, 15,500 & 15,700 strike, with 15,500 & 15,700 acting as a powerful resistance wherein there has been writing of 11.53Lac shares & 14.74 Lac shares respectively. The higher OI on the Place side is at 15,000 -14,800 & 14,500 strike, with 15,000 acting as a powerful assistance as there has been of writing of 17.96Lac. Fiis compared to last week have improved their Future Index Long position by 27,453 contracts & have decreased their Future Index Short by 18,056 contracts.The tentative variety for the present week is probably to be involving 14,800 to 15,500.
Bank Nifty outlook
Bank Nifty began the week on flat note and acquiring momentum for most element of the week led it to close on a powerful note. Bank Nifty closed at 34607 with a acquire of 2437 points on a weekly basis.
On the weekly chart the index has formed a lengthy Bullish candle forming larger High-low compared to prior week and has closed above prior week’s higher indicating positive bias. The index is moving in a Higher Top and Higher Bottom formation on the everyday chart indicating sustained up trend on lengthy term charts. The chart pattern suggests that if Bank Nifty crosses and sustains above 34800 level it would witness acquiring which would lead the index towards 35300-35800 levels. However if index breaks under 34000 level it would witness promoting which would take the index towards 33600-33200. Bank Nifty is trading above 20, 50 and one hundred day SMA’s which is significant quick term moving typical, indicating positive bias in the quick term. Bank Nifty continues to stay in an uptrend in the medium term, so acquiring on dips continues to be our preferred approach. For the week, we count on Bank Nifty to trade in the variety of 36000-33500 with mixed bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have each turned positive and are above their respective reference lines indicating positive bias.
Bank Nifty derivative outlook
Bank Nifty futures witnessed raise in open interest by 13.35% by adding 1.99 Lac shares with value gains of 7.74% indicating Long Build Up. In BankNifty the highest OI on the Contact side in the month-to-month expiry is at 35,000 -35,500 & 36,000 strike, with 35,000 & 36,000 acting as a powerful resistance zone wherein there has been writing of 5.87Lac & 4.52Lac shares respectively, though on the Place side highest OI is at 34,000 – 33,500 & 33,000 strike, with 34,000 & 33,500 acting as a powerful assistance level as there has been writing of 6.52Lac & 3.59Lac shares in OI respectively. IndiaVix is at the moment at 19.08 % and has been on a downward trajectory following producing a current higher of 21.15% suggesting self-confidence and stability in present market place trend and additional descend from these levels will additional augment for more uptrend in the market place.
Sectors and stocks in focus this week
We count on Banking, IT, Pharma, Healthcare, FMCG and Oil & Gas sectors to do effectively in the close to term. One can focus on stocks like State Bank of India (SBI), Housing Development Finance Corporation (HDFC Ltd), Larsen & Toubro, Cipla, Pidilite Industries, Wipro, Motherson Sumi for close to term bullish trend.
(Rajesh Palviya is 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 prior to investing.)