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F&O Expiry week outlook | Nifty may end May series between 15,100-15,400 levels: Aditya Agarwala of Yes Securities

Broader markets continue to remain resilient as the number of COVID-19 cases has started to decline leading to hopes of the economy reopening faster than expected.

May 23, 2021 / 10:06 AM IST
A successful breakout from this consolidation resistance could lead to a significant up move in the realty stocks in the coming months.

A successful breakout from this consolidation resistance could lead to a significant up move in the realty stocks in the coming months.

 
 
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On the Call option front, we have seen addition in Open Interest in the 15,400-15,500 strikes which suggest Index can make an attempt towards 15,400-15,500 which will act as an immediate hurdle for next week, Aditya Agarwala, Senior Technical Analyst - Yes Securities, said in an interview with Moneycontrol’s Kshitij Anand.

Q: Bulls got their grip back on D-Street pushing benchmark indices higher. Nifty50 closed above 15000 levels for the week ended May 21. What led to the price action in the volatile week gone by?

A: Benchmark Index Nifty-50 Index finally managed to break out of the consolidation phase and end the week beyond the key cluster of resistance i.e. 15,050.

Further, the month of May is turning out to be one that belongs to the Bulls unlike the contrary belief of “Sell in May and Go away”.

For the week Nifty gained 3.40 percent and this outperformance can be attributed to the declining COVID-19 cases which has fallen below 3lakh cases after hitting a peak of 4lakh single-day cases.

Traders should now watch out for a sustained trade beyond 15,100 in the coming trading session for a move towards 15,350-15,430.

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Moreover, a bullish crossover between 20-DMA & 50-DMA suggests that the intermediate trend has turned bullish and it’s a matter of time before the Index hits 15,400 levels.

Q: Small & Midcaps remained resilient in the week gone by. What is supporting the prices?

A: Broader markets outperform the Benchmark Indices in the week gone by following minor profit booking witnessed in the prior week.

Broader markets continue to remain resilient as the number of COVID-19 cases has started to decline leading to hopes of the economy reopening faster than expected.

Moreover, broader markets back in the US are also resilient and continue to outperform while the Mid & Smallcap Indices in India still have a lot of catching up to do with their US counterparts post the market crash in March’20.

Further, better than expected 4th quarter results of several mid and small-cap companies are aiding to the rally in the broader markets.

Q: Where do you see markets in the final leg of May which is also the expiry week? Where do you see the expiry for the May series?

A: Nifty-50 finally managing to close beyond the 15,050-15,100 resistance zone has led to hopes of a strong close in the May series.

Further, significant addition in the Open Interest in 15,000 & 15,100 Put options suggests that bulls will protect the 15,100-15,000 level and this should act as key support for next week.On the Call option front, we have seen an addition in Open Interest in the 15,400-15,500 strikes which suggest Index can make an attempt towards 15,400-15,500 which will act as an immediate hurdle for next week. So data suggests Index can end the May series between 15,100-15,400.

Q: What led to the price action in the Realty index last week?

A: The Nifty Realty Index is interestingly placed at current levels and outperformance with gains of 6.70 percent in the week gone by has caught the eye of several traders on D-street.

The index recently took support at the cluster of previous lows and bounced back, moreover, it is now approaching the key hurdle between 370-375 zone which happens to be the multiyear consolidation resistance.

A successful breakout from this consolidation resistance could lead to a significant up move in the realty stocks in the coming months.

RSI too has turned upward after taking support at the 55 level which is a sign of strength.

Q: What are your trading bets for the next 3-4 weeks? Please give target as well as stop loss.

A: Equity recommendation

Shriram Transport Finance: Buy | LTP: Rs 1,479 | Target: Rs 1,670 | Stop Loss: Rs 1,370 | Upside 13 percent

The stock has broken out from a Pennant pattern consolation resuming the uptrend. Further, a bullish crossover between 20-DMA & 50-DMA confirms the bullishness.

Moreover, RSI has formed a positive reversal pattern suggesting higher levels in the coming trading sessions.

City Union Bank: Buy | LTP: Rs 175 | Target: Rs 190 | Stop Loss: Rs 167 | Upside 8 percent

The stock has turned upwards after taking support at the lower end of the channel support suggesting bullishness.

Further, on the daily chart, it has taken support at the key short-term moving averages confirming bullishness.

PNC Infratech Ltd: Buy | LTP: Rs 249 | Target: Rs 270| Stop Loss: Rs 235 | Upside 8 percent

The stock has turned upwards after taking support at the lower end of the bullish Flag pattern suggesting bullishness.

Further, on the weekly chart, it has taken support at the trendline in its throwback from which it had broken out previously confirming bullishness.

Oberoi Realty: Buy | LTP: Rs 611 | Target: Rs 700 | Stop Loss: Rs 565 | Upside 14 percent

The stock has broken out of a Triangle pattern resistance triggering the resumption of the bull trend. Moreover, on the monthly chart, it is on the verge of a breakout from the cluster of previous all-time highs placed between 630-640, a successful breakout on volumes will extend the uptrend.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Kshitij Anand is the Editor Markets at Moneycontrol.

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