By Rajesh Palviya
Nifty closed at 15860 with a acquire of 177 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. 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 15900 level it would witness acquiring which would lead the index towards 16100-16300 levels. However, if index breaks beneath 15700 level it would witness promoting which would take the index towards 15600-15500. Nifty is trading above 20 and 50 day SMAs which are critical brief term moving averages, indicating positive bias in the brief term. Nifty is anticipated to stay in an uptrend to sideways zone till it breaks 10600 on the downside. For the week, we count on Nifty to trade in the variety of 16300-15800 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 derivatives outlook
Nifty futures on Friday closed at 15888 on a positive note with price tag gains of .35% (compared to preceding day) and 3.10% boost in open interest adding 2.89Lac shares indicating Long Build Up. The sentiment indicator Computer Ratio is at the moment trading at 1.20 despite the fact that above the median line but in a comfy zone indicating a positive bias in the market place. In Nifty the higher OI on the Contact side in the weekly expiry scheduled 01st July is at 16,000(31.90L), 16,200(25L) & 16,500(26.88L), with 16,000 acting as an critical resistance level wherein there has been writing of 11.52Lac shares followed by 16400. The higher OI on the Place side is at 15,700(24.44L) -15,800(24.28L) & 15,600(18.70L) strike, with 15,800 & 15,700 acting as a robust help level as there has been of writing of 11.25Lac & 8Lac shares respectively. So the most probable variety indicated is 15700-15500 on the decrease side and on the upside its 16000-16200.
Bank Nifty outlook
Bank Nifty closed at 35365 with a acquire of 807 points on a weekly basis. On the weekly chart the index has formed a extended bullish candle forming larger High-Low compared to preceding week and has closed above preceding week’s higher indicating positive bias. Since previous 3-5 weeks, index has been consolidating inside 35800-34000 levels indicating brief term consolidation. Hence any either side breakouts will indicate additional path.
The chart pattern suggests that if Bank Nifty crosses and sustains above 35500 levels it would witness acquiring which would lead the index towards 36000-37200 levels. However if index breaks beneath 34900 level it would witness promoting which would take the index towards 34400-34000. 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 acquiring on dips continues to be our preferred approach. For the week, we count on Bank Nifty to trade in the variety of 37000-34500 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 derivatives outlook
Bank Nifty futures on Friday closed at 35364 on a positive note with price tag gains of 1.50% (compared to preceding day) and 4.60% boost in open interest adding .85Lac shares indicating Long Build Up. In Bank Nifty the higher OI on the Contact side in the weekly expiry scheduled 01st July is at 35,500(9.37L), 36,000(9.11L) & 37,000(8.24L), with 36,000 & 36,500 acting as a robust resistance wherein there has been writing of 5.91Lac & 3.47Lac shares in OI respectively. The higher OI on the Place side is at 35,000(11.14L), 34,500(8.12L) & 34,000(7.14L) strikes, with 35,000 & 35,200 acting as a robust help level followed by 34,500 levels as there has been of writing of 8.15Lac & 3.38Lac shares respectively. The pivotal level for the Bank nifty is at 35,500 as each on the get in touch with side as nicely as on the place side there has been addition of 4.31Lac & 3.42Lac shares in OI respectively though the tentative variety for the existing weekly expiry is probably to be among 34,000-34,500 to 36,000-36,500.
Sector and stocks in focus this week
We count on the IT, Capital goods, Chemical, Metal and Banking sectors can do nicely in the close to term. One can focus on stocks like TCS, Infosys, Maruti Suzuki India, HDFC Life Insurance Company, National Aluminium, Tata Steel, Cummins India, Glenmark Pharmaceuticals and Marico can do nicely in close to term . From the Midcap space, one can focus on stocks like Skipper, Andhra Sugars, Sterling and Wilson Solar, GoodYear India, D-Link India, Nocil .
(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 ahead of investing.)