WEEKLY RESISTANCE FOR NIFTY: 15700, 15850, 16000
PIVOT POINT: 15500
WEEKLY SUPPORT FOR NIFTY: 15350, 15200, 15000
DAILY RESISTANCE FOR NIFTY: 15650, 15750, 15850
PIVOT POINT: 15600
DAILY SUPPORT FOR NIFTY: 15500, 15400, 15300
DAILY CHART FOR NIFTY
We had
a flat start to the week on Monday morning and in fact, in the initial trade,
there was some mild negativity seen in the market. But similar to the recent
trend, market absorbed the pressure and then resumed its upward momentum, once
again led by the giant RELIANCE. As the day progressed, the buying momentum
continued to first reach the new milestone of 15500 and in the final hour 15600
became the reality as well. Eventually, the Nifty ended the session with nearly
a percent gains. Tuesday session started higher to post a new high beyond
15600. However in the absence of few heavyweights’ contribution, market could
not extend the lead; in fact, we saw some minor profit taking in the first
half. This was followed by a complete lull for the remaining part of the
session. Eventually Nifty ended the session slightly below 15600 with
negligible losses. Wednesday’s session started on a sluggish note owing to
mixed global cues. As the day progressed, the index extended its losses a bit
due to some profit booking in the few heavyweights. However post the
mid-session, the sudden buying emerged at lower levels which pulled the index
higher to conclude the session with a negligible gain in Nifty. Markets opened
higher on Thursday at new highs as suggested by the SGX Nifty early in the
morning. During the first half, market came off marginally but reversed from
midway after partially filling up the opening gap. The buying momentum
accelerated in the final hour of the session to reach yet another milestone of
15700. Eventually the weekly expiry panned out tad below this by marking daily
gains over seven tenths of a percent.
NIFTY BANKNIFTY: A STRONG SUPPORT WILL BE @
15500; STRONG RESISTANCE LEVEL SEEN @ 15800
The
kind of price action we have been witnessing since few days, the commentary
would sound a bit repetitive because there is nothing different to talk about.
As we have been mentioning, every 100 points upside level should be treated as
immediate resistance and now this level comes at 15800-16000. On the flipside,
15600 would be seen as intraday support and any sustainable move below this
point would trigger some mild corrective move towards 15525 – 15450. Only a
handful of index heavyweights are giving some notable moves, otherwise the real
action still continues in the broader end of the spectrum. Stock from the cash
segment is literally roaring and hence it’s advisable to stick to this
approach.
TECHNICALLY SPEAKING.
It was yet another week wherein the Nifty maintained its positive posture. However, it wasn’t a smooth ride as we witnessed couple of pull back moves mainly due to the nervousness seen in the global markets. Post some hiccups around 15600 mark, we finally saw a sustainable move beyond this psychological levels in the mid of the series and then slowly extended the up move to almost touch the 15700 mark. This couldn’t have been possible without the late participation of banking index which was consolidating during the initial two weeks of May series. As far as F&O data is concerned, we witnessed decent longs formation during the series especially in the Banknifty. Rollover in Nifty and Banknifty stood at 77% and 81%, respectively. These figures are above the three month averages which clearly suggest that the long formed in May series have been rolled over. Recently, FIIs have been net buyers in equities but due to huge selling in first half of the month they have turned net sellers of worth Rs. 9341 crores MoM. In F&O space too, they added bearish bets initially which resulted in index futures ‘Long Short Ratio’ tanking below 50%. Fortunately, they halted selling once the global market looked stable and then added meaningful longs along with covering of shorts. On the expiry day, they preferred carry forwarding longs and now the ‘Long Short Ratio’ stands at 89%. Considering the above data point, we won’t be surprised to see Nifty entering the uncharted territory any time soon. Hence, we maintain our positive stance on market and would advise trader’s to adopt buy on dips strategy until we manage to sustain above 15500-15300 levels. On the chart, the Nifty continues to hold above a rising trend line that has held the important lows of the last few months. This implies that the index remains in an intermediate uptrend. The Nifty has also recently made higher bottoms at 15,416, 15,591, and 14784 and continues to trade above the 20 and 50-day SMA, which gives further evidence of an uptrend. While we expect the Nifty to move higher and make new life highs in the coming sessions, we also remain open to short-term corrections and price consolidations. Crucial support is at 15374. Nifty has crossed the major rising channel support and is now trading around it. Market breadth also remained positive for most of the week but BankNifty is still a point of concern given that it is still trading below its previous resistance. BankNifty might take its own time to catch up but it can also turn out to be a classic Dow Theory divergence where one index is making a new high but the other is making a lower high. Until we don't see any significant bearish evidence, we suggest traders maintain a mildly bullish outlook. The immediate support is now placed at 15350. The fourth-quarter result season pace has been relatively slower this fiscal wherein relatively fewer companies from several sectors have announced their earnings till now. The coming weeks could see a number of PSU heavyweights including SAIL, NTPC, Coalindia etc. in focus as they come out with their numbers. Further, key developments on the disinvestment story could also keep the PSU stocks on radar. Investors should therefore place trades cautiously on PSUs to buffer from any unforeseen shocks owing to such announcements. Meanwhile, Indian markets could continue to mimic the movement across global commodities and equities.
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