NIFTY WEEKLY OUTLOOK & MAY EXPIRY TRADING TIPS 27 MAY TO 31 JUN 19

WEEKLY RESISTANCE FOR NIFTY: 11900, 12000, 12200

 PIVOT POINT: 11800

WEEKLY SUPPORT FOR NIFTY:  11700, 11600, 11500

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 11900, 11950, 12000

PIVOT POINT: 11850

DAILY SUPPORT FOR NIFTY:  11800, 11750, 11700

DAILY CHART FOR NIFTY

Bulls have shown tremendous strength on the long-awaited exit polls, despite the ongoing ambiguity in the US-China trade talks. With the last phase of elections scheduled for Sunday, the all-round buying across the sectors reflects market's anticipation that exit polls may indicate formation of a stable government. Monday was all about the result of exit polls over the weekend. With almost all polls indicating NDA government back in power with thumping majority, the market overjoyed with this and had a massive bump up at the opening well above the 11600 mark,. In the initial hour, there was mild profit taking seen; but eventually this got bought into and index went on register colossal rally of over three and half a percent to the previous close.  Monday’s colossal rally was followed by a gap up opening at new record highs on Tuesday. During the first half, index consolidated in a range; but second half turned out to be a disappointing one as we saw broad based sell off till the closing trade of the session. In this process, index shaved off precisely a percent from Monday’s massive upsurge. Wednesday, markets opened slightly higher as indicated by the Nifty early in the morning. Subsequently, index consolidated in a range of nearly 100 points throughout the day to eventually close with one fourth of percent gains. On the sectoral front, two heavyweight pockets, Banking and IT had diverging moves. The banking index saw decent pull back; whereas the IT index continues to underperform. Thursday, since morning, all eyes were on election counting and right from the word go, the BJP led NDA had taken a head start. As a result, we had a massive gap up opening tad above the 11900 mark. As the counting progressed, this early morning lead got extended to go beyond the magical figure of 12000. However, all of a sudden, we saw index taking a complete nosedive after clocking new highs, in fact the profit taking was so immense, we not only wipe off all gains but also went on to sneak well inside the negative territory. Friday market ended near day's high level on May 24 after BJP led NDA government got clear mandate in the Lok Sabha Election 2019. At close, the Sensex was up 623 points at 39434, while Nifty was up 187 points at 11844.

NIFTY: A STRONG SUPPORT WILL BE @ 11200; STRONG RESISTANCE LEVEL SEEN @11500

Expiry is ahead in the coming week. We must accept the fact, the forthcoming session is likely to see roller coaster rides and the overall trading range would probably be considerably higher than average range. Momentum traders are advised to stay light and would be necessary to remain flexible in case of any adverse reaction. Last week we had clearly stated about this space which is in a last phase of time as well as price correction. We have already seen a good leap from lows and expect further legs to unfold, which will eventually bring back the wider smile on many traders’/ investors’ faces. Historically, the stock market associates the month of May with Bearishness. This time too, it is playing out in a similar fashion as the Bears have started taking command. The old adage “Sell in May & Go on a Vacation” holds particularly true, as the market seems ready to test lower levels going forward. The short term trend has turned negative this week, as now every rally is being sold into, with 20dma and 200dma providing strong Resistances. The Bulls have a flicker of hope as the market has taken support at the Bullish Gap 11750-11650 and closed within it.

TECHNICALLY SPEAKING.
At the end of Thursday’s eventful session, we must accept the fact, it’s very difficult to gauge what exactly market wants to do. The entire nation started celebrating a second term for Mr.Narendra Modi as a prime minister and markets initially giving a thumps up was no surprise. But what happened after this, was really an unexpected reaction (although we expected a possible profit taking towards 11850 – 11800) for most of the market participants. We may try to figure out, why was such unusual reaction from the market; but at the end, we are left with no choice than just accept it. Anyways, its history now and we need to focus on how things are going to pan out henceforth. In our sense, 11600 – 11550 would act as a sheet anchor and we will not be surprised to see buying resuming in next few day. Technically, Indian Stock Market is still in positive zone. Traders should continue to hold long positions as of now. Every downfall would be an opportunity for traders to go long in the market. Market is looking to see a sharp breakout if closes above 11800 levels for Nifty. Next  Nifty would see strong support at 11750-11650-11600-11500 whereas strong resistance would be seen at 11900-11950-12000-12200 levels. Since, MACD and Price ROC are both positive and have signaled a fresh Buy. RSI (50) indicates bullish momentum. 

This week, both the nifty overcame the short term average of 22 dma Nifty 11800 and closed above it. Nifty continues to remain above the medium term average of 55 dma Nifty 11750 but are just below the long term average of 200dma Nifty  11900 . Thus the trend in the short term timeframe has turned bullish; whereas the trend in the medium term timeframe continues to remain down but the trend in the long term timeframe continues to remain bullish.