NIFTY WEEKLY OUTLOOK & MAY EXPIRY TRADING TIPS 24 JUN TO 28 JUN 19

WEEKLY RESISTANCE FOR NIFTY: 11850, 11950, 12050

 PIVOT POINT: 11750

WEEKLY SUPPORT FOR NIFTY:  11600, 11550, 11500

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 11800,11850,11900

PIVOT POINT:11700

DAILY SUPPORT FOR NIFTY :  11650,11600,11550

DAILY CHART FOR NIFTY

It was yet another week of consolidation for our markets in the absence of major triggers. Index started off well with some hope of surpassing the stiff hurdle of 12000, but once again the attempt turned unsuccessful. During the remaining part of the week, index kept vacillating around the lower band of the range to eventually conclude tad above the 11800 mark. Although it was a week of consolidation for our markets, the overall bias remained on the negative side and hence, any intra-week pull back was getting sold into. Now, with this price development we can see the trading range getting shrunk further and whenever this happens, soon we get a breakout (on the either side) from the congestion zone. On the lower side, 11770 is the level to watch out for. Any sustainable move below this would trigger sell off to head towards 11625-11555 levels. However, looking at the broader picture, we are still hopeful and expect the market to breakout in the upward direction. On the higher side, 11955-12000 has become a sturdy wall. At this juncture, the pragmatic strategy would be to stay light and wait for breakout from the mentioned range to create aggressive positions .  Monday morning, the global set up looked a bit encouraging and hence, in-line with Asian peers, we started proceedings for the week slightly higher after Friday’s tail end correction. However, it was merely a formality as we saw index correcting immediately to pare the opening lead. This was followed by a continuous decline throughout the remaining part to eventually conclude well below the 11700 mark. Monday’s sharp selloff was followed by a flat opening in our markets on Tuesday. The index then witnessed a range bound trading with a positive bias for the first half. The second half was however very volatile as we witnessed volatile swings on both sides with butchering seen in many midcap counters. The index eventually ended near the opening levels with marginal gains of 0.17% tad below 11700 levels. Wednesday, our markets witnessed a roller coaster move with wild swings seen on both sides of the trend. The index started with a gap up opening which got extended to test the 11800 mark however in the midsession we witnessed a sharp selloff which dragged Index to mark intraday low of 11625. During the said selloff there was carnage seen in many midcap counters. Eventually quite similar to the previous session Index witnessed a strong bout of buying in the last half an hour to push prices higher to close unchanged at 11691. Despite Nifty suggesting a positive start, we had a gap down opening to surprise most of the market participants on Thursday. There was some nervousness seen in the initial trade, but all of a sudden strong buying emerged at lower levels which not only continued but also accelerated as the day progressed. In this course of action, Nifty went on to thrash all intraday hurdles and eventually concluded the weekly expiry well above the 11800 mark by clocking smart rally of more than a percent. Market ended lower on Friday, wiping out previous session's gains, amid weakness in auto stocks, as uncertainty around the US-China trade negotiations and rising oil prices outweighed investor euphoria around the US Federal Reserve’s hints at future rate cuts.

NIFTY: A STRONG SUPPORT WILL BE @ 11600; STRONG RESISTANCE LEVEL SEEN @12000

It was certainly not the kind of start for the week, most of the traders would have wished for. There was sustained selling seen throughout the week and importantly, we could see broad based participation in this decline, which generally does not bode well for the bulls. We have slipped below the key support of 11769 and extended the correction towards 11650. Since last few days, there has been no respite for this downward move; but looking at the broader picture we are still not convinced with the same. Hence, we advise traders not get carried away by this correction and should ideally be prepared for an upward swing if the buying emerges at lower levels. On chart, we can see a formation of bullish ‘Wolfe Wave’ pattern and as per the requirement, 161% retracement of the recent up move coincides around 11630 - 11610. Going ahead, we will not be surprised to see this fall getting arrested around the mentioned support zone. Hence, one should avoid fresh shorting now and should be prepared with potential candidates which may give decent relief moves. Positionally, we remain bullish as long as the gap area created after exit poll numbers remains intact and probably, we are in the final leg of time as well as price correction. Hence, we continue to advise avoid shorting and rather be prepared with potential candidates that can give decent up move from here on. For the day, support remains at 11640 and on the higher side, initially the bounce back should extend towards 11780-11820 levels. With continuation to our recent commentary.

TECHNICALLY SPEAKING.

Let’s get into a bit of technical now. If we refer to our last couple of trading days, we had mentioned about the formation of ‘Bullish Wolfe wave’ pattern in Nifty on hourly chart. As per the requirement, the ‘Potential Reversal Zone’ of this pattern was at 11630. Since last three days, index has been rebounding sharply after making lows precisely around this point and yesterday finally this pattern has showed its significance. In addition, the higher end of the upward gap area created post the exit poll numbers was around 11591 and we were of the firm opinion that this gap area will not be violated. Thursday’s colossal rally has validated this contradictory opinion and now we expect this upward trajectory to continue towards 11900 – 12000 in coming days. On the flipside, the intraday support is now seen at 11700 – 11500.