By Rajesh Palviya
Nifty closed at 15,436 with a obtain of 260 points on a weekly basis. On the weekly chart the index has formed a extended bullish candle forming larger High-low compared to earlier week and has closed above earlier 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 15500 level it would witness acquiring which would lead the index towards 15650-15800 levels. However if the index breaks under 15300 level it would witness profit booking which would take the index towards 15200-15100.
Nifty is trading above 20 and 50 day SMA’s which are essential quick term moving averages, 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 technique. For the week, we count on Nifty to trade in the variety of 15800-15300 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
In May series Nifty witnessed a rollover of 77.28% compared to 66.28%, adding 2.35Lac shares with value gains of 2.97% and began June series with OI of 104.73Lac shares compared to 102.38Lac shares in May expiry. Nifty futures on Friday closed at 15463.85 on a positive note with value gains of .50% (compared to earlier day) and 5.33% improve in open interest adding 5.26Lac shares indicating Long Build Up. The sentiment indicator Computer Ratio is at the moment trading at 1.32 though nicely above the median line but in a comfy zone indicating a positive bias in the marketplace. In Nifty the higher OI on the Contact side in the weekly expiry scheduled 03rd June is at 15,500(27.03L), 15,600(23.29L) & 16,000(40.62L), with 15,500 & 15,600 acting as a resistance wherein there has been writing of 12.61Lac shares & 11.43 Lac shares respectively. The higher OI on the Place side is at 15,300(25.64L) -15,000(23.64L) & 14,700(23.73L) strike, with 15,400 acting as a sturdy pivotal level as there has been of writing of 16.63Lac shares. So as per the possibilities information the essential variety indicated is 15,400 to 15,600 and any sustained move above or under this variety will indicate the path of marketplace trend.
Bank Nifty outlook
Bank Nifty began the week on a flat note and acquiring momentum for most aspect of the week led it to close on a positive note. Bank Nifty closed at 35141 with a obtain of 535 points on a weekly basis.
On the weekly chart the index has formed a compact Bullish candle forming larger High-low compared to earlier week and has closed above earlier week’s higher indicating positive bias. The index is moving in a Higher Top and Higher Bottom formation on the every day chart indicating sustained up trend on extended term charts. The chart pattern suggests that if Bank Nifty crosses and sustains above 35500 level it would witness acquiring which would lead the index towards 36500-36800 levels. However if index breaks under 34500 level it would witness promoting which would take the index towards 34000-33000. Bank Nifty is trading above 20, 50 and one hundred day SMA’s which is essential 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 technique. For the week, we count on Bank Nifty to trade in the variety of 36800-34500 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.
Bank Nifty derivative outlook
Bank Nifty witnessed a rollover of 80.76% compared to 64.60%, adding 3.74Lac shares with value gains of 4.09% and began June series with OI of 17.70Lac shares compared to 13.97Lac shares in May expiry. Bank Nifty futures on Friday closed at 35321.80 on a positive note with marginal value gains of .04% (compared to earlier day) and 1.62% improve in open interest adding .28Lac shares indicating Long Build Up. In Bank Nifty the higher OI on the Contact side in the weekly expiry scheduled 03rd June is at 35,500(9.37L), 36,000(9.11L) & 37,000(8.24L), with 36,000 acting as a sturdy resistance wherein there has been writing of 4.13Lac shares. The higher OI on the Place side is at 35, 000(8.92L), 34,500(7.52L) & 34,000(6.29L) strikes, with 35,000 & 34,500 acting as a sturdy assistance level as there has been of writing of 4.13Lac & 2.74Lac shares respectively.
The tentative variety for the existing week is probably to be among 34,000 to 36,000. India Vix is at the moment at 17.40 % and has been in downward trajectory following generating a current higher of 21.32% suggesting self-confidence and stability in existing marketplace trend and additional descend from these levels will additional augment for more uptrend in marketplace.
Sectors and stocks in focus this week
We count on Banking, Financial, IT, Pharma, FMCG, Oil & Gas, and Consumer Durable sectors to do nicely in the close to term. One can focus on stocks like State Bank of India (SBI), Punjab National Bank (PNB), Cipla, Reliance Industries Ltd (RIL), Adani Ports and Special Economic Zone, Just Dial, Wipro, Piramal Enterprises Ltd (PEL), Minda Industries, Colgate-Palmolive (India), REC Ltd, for the 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 just before investing.)