By Rajesh Palviya
Markets are maintaining a incredibly close watch on the ongoing wellness crisis w.r.t second wave of covid across all the states in the nation. One of the largest issues for the market place is the escalating state smart lockdowns, having said that, compared to last year, markets have been more resilient primarily due to fastening of vaccination drives across the nation & the government’s impetus on revamping the health-related infrastructure and coping up with ongoing challenges at war footing.
Nifty 50 index commenced the week on a positive note and gained momentum in the initial half, having said that, Friday’s losses erased earlier gained to close at 14,631 gaining 1.94% on a weekly basis. For the previous 3 months, index has been hovering inside the “Down-Sloping Channel” ranging 15000-14200 levels representing sideways to damaging bias. On the day-to-day chart the index has formed a bearish candle with extended upper shadow indicating promoting stress as properly as resistance at greater levels. The index continues to move in a Lower Top and Lower Bottom formation on the hourly chart indicating damaging bias.
The chart pattern suggests that if Nifty crosses and sustains above 14,700 level it would witness shopping for which would lead the index towards 14,900-15,000 levels. However if the index breaks under 14,500 level it would witness promoting which would take the index towards 14,400-14,250. Nifty is approaching its 20-day MA and a bounce from the similar may possibly show some shopping for interest. Nifty continues to stay in an uptrend in the medium and extended term, so shopping for on dips continues to be our preferred method. For the week, we count on the index to trade in the variety of 14800-14150 levels with mixed bias.
The day-to-day and weekly strength indicator RSI continue to stay weak and sustaining under its reference line indicating damaging bias ahead.
Nifty derivative outlook
Nifty rollover in April series stood at 66.28% compared to 81.67% considerably down by virtually 20%, although in absolute terms there was a boost of 4.03Lac shares( from 98.34 lac to 102.38 Lac) in open interest with an boost in cost of 4% indicating a extended develop up. India VIX indicator of market place volatility is trading close to its month-to-month higher indicates that even although Nifty has rallied in the last handful of session but apprehension & caution at greater levels is not ruled out. At the commence of May series the sentiment indicator Computer Ratio is trading at 1.07 levels indicates positive bias having said that it will be exciting to watch how it additional pans out. The highest OI on the Get in touch with side at weekly 6th May expiry is at 15,000 & 15,500 and on the Place side it is at 14,500 followed by 14,200 & 14,000.Nifty will face Strong resistance at 15,000 levels as there has been Call writing of 14.72Lac shares at the stated level, although vital assistance will be seen at 14,200 & 14,000 levels as each the Put strike have seen writing of 4.9 & 9.9 Lac shares in OI respectively.
Banknifty outlook
Bank Nifty opened the week on a positive note and gained upside momentum in the initial half having said that profit booking from 34300 levels erased some of the earlier gains which led the index to close at 32781 with achieve of 3.16%. The weekly cost action has formed a tiny bullish candle carrying extended upper shadow indicating profit booking at greater levels. On the day-to-day chart the index has formed a bearish candle with extended upper shadow indicating promoting stress as properly as resistance at greater levels. The index continues to move in a Lower Top and Lower Bottom formation on the hourly chart indicating damaging bias The chart pattern suggests that if Banknifty crosses and sustains above 32800 level it would witness shopping for which would lead the index towards 33200-33600 levels. Important Supports for the day is about 32600 However if index sustains under 32600 then it may possibly witness profit booking which would take the index towards 32300-32000 levels. Banknifty is trading above its 20 day SMA which indicates positive bias in the quick term. Banknifty continues to stay in an uptrend in the medium and extended term, so shopping for on dips continues to be our preferred method. The day-to-day strength indicator RSI has retraced back to the 50 mark indicating easing of momentum.
Bank Nifty derivative outlook
Bank Nifty has also seen a reduce in rollover from 88.18% in March expiry to 64.60% in April expiry with an unwinding of 15.56Lac shares (from 29.54Lac to 13.97Lac) in OI & cost achieve of 2.15% indicated Short covering. The higher OI on the Get in touch with side at weekly 6th May expiry is at 33,500 & 34,000 and on the Place side it is at 32,000 followed by 31,500 & 31,000.BankNifty will face Strong resistance at 34,000 levels as there has been Call writing of 3.84Lac shares at the stated level, although vital assistance will be seen at 32,000 & 31,000 levels as each the Put strike have seen writing of 1.27 & 1.13Lac shares in OI respectively.
Sectors, stocks to watch
We count on Pharma, Healthcare, IT, Metal, Chemical and Insurance sectors to do properly in the close to term. One can concentrate on stocks like Sun Pharmaceutical Industries, Glenmark Pharmaceuticals, Deepak Nitrite, Aarti Industries, JSW Steel, ICICI Prudential Life Insurance Company, TCS, Wipro, for a close to-term bullish trend. Midcap space also appears appealing and we count on stocks like Carborundum Universal , JK Tyres, Greave Cotton, Usha Martin , Laxmi Organic Industries, Gujarat Narmada Valley Fertilisers Chemicals (GNFC) probably to do properly in the close to term.
(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 economic advisor prior to investing.)