By Rajesh Palviya
Nifty began the week on a flat note on the other hand getting momentum all through the week led the index to finish on a positive note. Nifty closed at 15923 with a achieve of 234 points on a weekly basis. On the weekly chart the index has formed a modest Bullish candle carrying reduce shadow indicating getting assistance at reduce levels.Since the previous 5-6 weeks, the index has been consolidating inside a broad variety of 15900-15500 levels representing a brief term sideways trend.
The chart pattern suggests that if Nifty crosses and sustains above 15950 level it would witness getting which would lead the index towards 16100-16300 levels. However if the index breaks beneath 15800 level it would witness promoting which would take the index towards 15700-15600. Nifty is trading above the 20 and 50 day SMA which is an critical brief term moving typical, indicating positive bias in the brief term. Nifty continues to stay in an uptrend in the medium term, so getting on dips continues to be our preferred tactic. For the week, we anticipate Nifty to trade in the variety of 16300-15800 with a positive bias.
The weekly strength indicator RSI is in bullish mode and sustaining above its reference lines indicating positive bias
Nifty Derivative Outlook
Nifty in the existing week has seen Short Covering with a value achieve of 214 points (1.36%) and OI shedding of 1.91lac shares(-1.98%) decreasing from 96.48Lac share to 94.57Lac shares. Nifty traded at a premium of 13 points compared to 33 points, even though the sentiment indicator Computer Ratio is at present trading at 1.24 which is above the median line but in a comfy zone indicating positive bias. In Nifty the higher OI on the Contact side in the weekly expiry scheduled 22nd July is at 16,000(40.05L), 16,200(32.73L) & 16,one hundred(25.41L) strike, with 16,000 & 16,200 acting as a robust resistance wherein there has been writing of 19.60Lac shares & 9.88Lac shares respectively.
The higher OI on the Place side is at 15,900(34.36L), 15,800(30.51L) & 15,700(26.51L) strike, with 15,900 & 15,700 acting as a robust assistance as there has been of writing of 9.88Lac shares & 9.70Lac shares respectively so critical levels to watch for will be 16000 and 15900 wherein if Nifty sustains above 16000 can move till 16200 even though on the other side if sustains beneath 15900 can test 15700 levels. The tentative variety for the existing week is most likely to be amongst 15,700 to 16,200. IndiaVix indicator of marketplace volatility is at present at 11.70% down by 9.56% on a weekly basis close to the lowest levels given that last 1 year indicating robust conviction and stability in existing marketplace trend and additional descend from these levels will augment for more of an uptrend in the marketplace.
Bank Nifty Outlook
Bank Nifty began the week on a flat note and getting momentum for most component of the week led it to close in positive terrain. Bank Nifty closed at 35752 with a achieve of 680 points on a weekly basis. On the weekly chart the index has formed a modest Bullish candle with shadows on either side indicating indecisiveness amongst participants relating to the path. Since the previous 6-8 weeks, index is consolidating inside 36000-34000 levels indicating brief term consolidation. Hence any either side breakout will indicate additional path.
The chart pattern suggests that if Bank Nifty crosses and sustains above 36000 level it would witness getting which would lead the index towards 36500-37200 levels. However if the index breaks beneath 35400 level it would witness promoting which would take the index towards 35000-34600. Bank Nifty is trading above 20, 50 and one hundred day SMAs which is an critical brief term moving typical, indicating positive bias in the brief term. Bank Nifty continues to stay in an uptrend in the medium term, so getting on dips continues to be our preferred tactic. For the week, we anticipate Bank Nifty to trade in the variety of 37200-35400 with a positive bias.
The weekly strength indicator RSI is moving upwards and is quoting above its reference line indicating positive bias.
Bank Nifty Derivative outlook
Bank Nifty in existing week has seen Short Covering with a value achieve of 586 points (1.66%) and OI shedding of .67lac shares (-3.13%) decreasing from 21.33Lac share to 20.66Lac shares and traded at premium of 105 points compared to 198 points. In Bank Nifty the higher OI on the Contact side in the weekly expiry scheduled 22nd July is at 36,000(16.71L), 36,500(10.84L) & 35,500(10.52L) strike, with 36,000 & 36,500 acting as a robust resistance wherein there has been writing of 8.95Lac shares & 4.22Lac shares respectively.
The higher OI concentration on the Place side is at 35,500(14.47L), 35,000(8.66L) & 35,800(6.07L) strike, with 35,500 & 35,000 acting as a robust assistance as there has been of writing of 7.11Lac shares & 3.83Lac shares respectively even though the critical level to watch will be 35800 as there has been addition of 6.95L shares on Call side & 2.75L shares on Put side clearly indicating to be a decisive level for next week trend followed by 35500. The tentative variety for the existing week is most likely to be amongst 35,000 to 36,500.
Sectors, stocks in focus this week
We think the IT, Pharma & Healthcare, Metal, Power and Realty sectors can do effectively in the close to term. One can focus on stocks like Lupin, Glenmark Pharma, Infosys, Tech Mahindra, Tata Steel, Hindalco Industries, Ushamartin, DLF, Indiabulls Real Estate, Prestige Estates Projects, Pidilite Industries, Bata India, Deepak Nitrite can do effectively in close to term.
(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 economic advisor ahead of investing.)