Nifty closed at 17853 with a achieve of 268 points on a weekly basis. On the weekly chart, the index has formed a extended bullish candle forming greater High-low compared to preceding week and has closed above preceding 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 17950 level it would witness acquiring which would lead the index towards 18100-18300 levels.
However, if index breaks beneath 17650 level it would witness promoting which would take the index towards 17500-17250. Nifty is trading above 20 and 50 day SMAs which are vital brief term moving averages, indicating positive bias in the brief term. Nifty continues to stay in an uptrend in the medium term, so acquiring on dips continues to be our preferred tactic. For the week, we anticipate Nifty to trade in the variety of 18300-17600 with a positive bias.
The weekly strength indicator RSI is above its respective reference lines indicating positive bias.
Nifty Derivative Outlook
Nifty futures closed at 17853.6 on a positive note with a (-)16.54% reduce in open interest and with a cost achieve of 1.42% indicating brief covering. PCR OI at the moment is at 1.27 levels which is above the median line and in a comfy zone indicating positive bias in the marketplace. FIIs have been net sellers in index futures to the tune of 2,808 crore through the last week.
This week key addition in month-to-month expiry was seen on the Place front with 17,800 17,700 and 17,500 strikes adding 25.95 lakh, 21.99 lakh and 13.94 lakh shares in OI respectively although there was no considerable unwinding witnessed in any strike.
There was an boost in Open Interest through the last week by 15,252 contracts. Options constructed up shows that for now Nifty has sturdy assistance at 17,500 followed by 17,700 & 17,800 and resistance at 17,900 levels followed by 18,000 & 18,200.
While 17,900, 18,000 & 18,200 strike Get in touch with and 17,500 strike Put followed by 17,700 & 17,800 strike has higher open interest concentration which suggests that Nifty is most likely to trade among these levels of 18,one hundred on upside and 17,500 on downside this week.
Bank Nifty Outlook
Bank Nifty began the week on a unfavorable note and remained exceptionally volatile on either side all through the week. Bank Nifty closed at 37830 with a achieve of 18 points on a weekly basis. On the weekly chart the index has formed a compact bullish candle with shadows on either side indicating indecisiveness amongst participants with regards to the path. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart indicating sustained up trend on extended term charts.
The chart pattern suggests that if Bank Nifty crosses and sustains above 38100 level it would witness acquiring which would lead the index towards 38500-38800 levels. However, if index breaks beneath 37200 level it would witness promoting which would take the index towards 36500-36200. Bank Nifty is trading above 20, 50, and one hundred day SMAs which are vital brief term moving averages, indicating positive bias in the brief to medium term.
Bank Nifty continues to stay in an uptrend in the medium term, so acquiring on dips continues to be our preferred tactic. For the week, we anticipate Bank Nifty to trade in the variety of 38800-37000 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 closed at 37854 on a unfavorable note with an 8.79% reduce in open interest indicating Long Unwinding. Bank Nifty has a sturdy assistance at 37,000 as 37,000 Put strike is possessing higher OI concentration followed by 37,500 & 36,000 although on the Call front 38,000CE strike has higher OI concentration indicating sturdy resistance level followed by 38,500 & 39,000.
(Rajesh Palviya, VP– Research (Head Technical & Derivatives), Axis Securities. Views expressed are the author’s personal.)