Jaydeb Dey
The Nifty on Wednesday ended 0.18 percent lower at 10,614.35. It opened gap down, amid negative global cues, and recovered around its critical support placed at 10,560, before ending the session above 10,600.
Reclaiming the 10,600 mark is definitely encouraging for the bulls. However, May series F&O expiry jitters is going to be a trend determining factor in trade today. The benchmark index reclaiming its 30-day exponential moving average (EMA) on the daily chart is a positive development. In addition, the rupee appreciation versus the dollar might be a positive trigger in trade today. However, a successive closing above 10,630 is necessary for unfolding the upmove towards 10,700. Below 10,560, the next support on the Nifty is placed around 10,500 levels.
On the Nifty hourly chart, early morning recovery with a double-bottom formation from Wednesday’s low of 10,559, followed by 200 EMA centric movements throughout the session, led the benchmark index to close over 10,600. Chart pattern suggests that the 10,560 is going to play a critical role in today’s session as well. The next support is placed around 10,500 levels.
Nifty patterns on multiple timeframes show that it reclaimed the 10,600 mark, before finishing the session just above its 30 EMA on the daily chart. Sustained closing above 10,630 is necessary for a recovery to the 10,700 mark.
Stewart & Mackertich Technical and Derivative Strategy Research view on May 31 Nifty Future monthly expiry:
Nifty Option Chain analysis in terms of percentage change in OI (at the end of yesterday's session)- Nifty Fut (CMP- 10,604.50) ended in 10 points discount against Nifty (CMP- 10,614.35). Maximum long OI in 10550-CE followed by minor long OI in 10600-CE, and 10650-CE against short OI in 10600-PE, 10650-PE, 10700-PE, and 10750-PE ahead of today’s expiry suggests, Nifty Future is likely to move on the positive side with critical support placed around 10,550.
Opinion- In case of intraday retracement Nifty Future may find support around 10,550. On a similar note, intraday trend is expected to remain volatile with positive bias within the price band of 10,550-10,750.
This view is subject to change if and only if Nifty Fut starts moving decisively below 10,550, next support is placed around 10,500.
The Bank Nifty previous session ended 0.28 percent up at 26,327.80. Supports are placed around 26,200 and 26,000, while the upside resistances are placed around 26,475 and 26,600.
Stewart & Mackertich Technical and Derivative Strategy Research view on May 31 Bank Nifty Fut monthly expiry:
Bank Nifty Option Chain analysis in terms of percentage change in OI (at the end of today's session)- Bank Nifty Fut (CMP- 26,250.75) ended in around 77 points discount against Bank Nifty (CMP- 26327.80). Maximum long OI build up in 26100-CE followed by 26200-CE against short OI build up in 26400-PE, 26500-PE, 26600-PE, 26700-PE, and 26800-PE ahead of today’s expiry suggests, Bank Nifty Fut is likely to move on the positive side with critical support placed 26,100.
Opinion- In case of intraday retracement Bank Nifty Fut may find support around 26,100. However, as the current trend suggets, it may again face tough resistance on rise around 26,600. On a similar note, intraday trend is expected to remain volatile with positive bias within the price band of 26,100-26,600.
This view is subject to change if and only if Bank Nifty Fut starts moving decisively below 26,100, next support is placed around 25,900.
Based on thorough technical study, the research firm recommends Indian Bank which can give up to 4 percent return in the near short term:
Indian Bank | Rating: Buy | Target: Rs 346 | Stop loss: Rs 319 | Return: 4 percent
The stock managed to recover from the 200 EMA on the daily chart and ended the session with a bullish body candle above the critical support placed around Rs 325.
Based on above mentioned observations, the firm recommends Indian Bank as a buy on dips for the short term target of Rs 346.
Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management Ltd. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management Ltd. It is advised that investors/traders should consult with their Certified Experts before taking any investment decision.
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