Jaydeb Dey
The Nifty ended Wednesday 0.41 percent lower at 10,570.55. For the third consecutive session, it continued to oscillate below 10,640 levels. Ending the session with a bearish body candle stands invalid as long as it remains stuck in the price band of 10,640 to 10,530. Hence, buying on dips around 10,530 and 10,480 can again be seen. On the flipside, 10,640 on the upside still remains the critical hurdle before a rise towards 10,670 levels.
On the Nifty hourly chart, negative divergence in the Relative Strength Index (RSI) is still intact, which may continue to building selling pressure on a rise around 10,640 levels. Downside supports for the index are placed around 10,530 and 10,480 levels.
Nifty patterns on multiple timeframes shows that it continues to oscillate below 10,640 levels. Rangebound movement with a positive bias may not be that encouraging for the bulls. Hence, cautious trading is advised. However, sector and stock specific volatility is going to be the dominant feature ahead of today’s April series futures and options (F&O) expiry.
The Bank Nifty on Wednesday ended 0.91 percent lower at 24,814.40 levels. Immediate pivotal support is placed around 24,700and 24,550 levels, while the upside resistance stands around 24,900 and 25,100 mark.
Nifty monthly expiry outlook
Nifty April futures ended at Rs 10,569.05, a 1.5 points discount against spot Nifty (CMP: Rs 10,570.55). Huge long open interest (OI) in 10,550CE followed by minor long OI in 10,600CE and 10,650CE against short OI in 10,600PE and long OI in 10,650PE ahead of today’s expiry suggests that Nifty futures may remain subdued around 10,550 levels. Also, immediate resistance for Nifty futures is placed around 10,650 and is going to be a critical factor.
Nifty futures may see intraday buying on dips around 10,550 levels and continues to face resistance on a rise around 10,600 and 10,650 levels. On a similar note, the intraday trend is expected to remain positive within the broader trading band of 10,550 to 10,650. This view is subject to change if and only if it starts moving decisively below 10,550 levels.
Bank Nifty monthly expiry outlook
Bank Nifty futures ended Wednesday at Rs 24,779.95, a 34 points discount against spot Bank Nifty (CMP: Rs 24,814.4). Huge long OI build up in 24,700CE and 24,800CE followed by 24,900CE against minor long OI build up in 25,000CE and 25,100CE ahead of today’s expiry suggests that index future is likely to hold downside support placed around 24,700 levels.
Bank Nifty futures may see intraday buying on dips around 24,700 levels and continues to face resistance on a rise around 25,000 and 25,100 levels. On a similar note, the intraday trend is expected to remain positive within the broader trading band of 24,700 to 25,100 levels. This view changes if the Bank Nifty future starts moving decisively below 24,700 levels.
Based on thorough technical study, the research firm recommends Tech Mahindra which can offer up to five percent return in the near short-term.
Tech Mahindra | Rating: Buy | Target: Rs 725 | Stop loss: Rs 665 | Return: 5%
The stock ended Wednesday just above its short-term upward trend line support placed around Rs 680 levels. The broader uptrend is still very much intact. Any occasional correction towards critical supports should be used as a buying opportunity. Rising positive OI in tandem with a rising trend makes the bull case even stronger. Based on above mentioned observations, we recommend Tech Mahindra as a buy on dips for the short-term, with an upside target of Rs 725 per share.
Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management. It is advised that investors/traders should consult with their certified experts before taking any investment decision.
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