Rajesh Palviya
The Nifty started the week on a flat note, however, buying momentum throughout the week led the index to end on a strong note. The Nifty closed at 11,900 with a gain of 272 points on a weekly basis.
On the weekly chart the index has formed a long Bullish candle forming higher High-low compare to previous week and has closed above previous week's high, indicating a positive bias. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart indicating a positive bias.
The chart pattern suggests that if the Nifty crosses and sustains above 11,950 level, it would witness buying which would lead the index towards 12,000-12,100 level. However if the index breaks below 11,800 level, it would witness selling that would take the index towards 11,720-11,600.
Nifty is trading above its 20, 50, 100 and 200 day SMA's which are important short term moving averages, indicating positive bias in the short-term. It continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy.
For the week, we expect the Nifty to trade in the range of 12,100-11,650 with a positive bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines, indicating positive bias.
Option data: Weekly Nifty PCR stands at 1.11, while Max Pain Strike is 11,850.
Weekly highest open-interest (OI) stands on Call Side at 12,000 CE at 21.31 lakh shares, followed by 11,900 of 18.88 lakh shares and 12,100 with 11.32 lakh shares.
Addition on Call side was observed in 12,000 CE with 7.23 lakh shares, 11,900 CE of 5.02 lakh shares.
Unwinding of 11,700 CE - 1.02 lakh shares.
Highest OI stands on Put side stands at 11,800 PE of 20.90 lakh shares followed by 11,700 PE of 16.64 lakh shares and 11,900 PE of 14.76 lakh shares. Addition on Put side was observed in 11,800 PE of 7.43 lakh shares, 11,900 PE of 6.22 lakh shares.
Bank Nifty Outlook:
Bank Nifty started the week on a flat note and witnessed extreme volatility on both sides. The Bank Nifty closed at 30,364 with a gain of 848 points on a weekly basis.
On the weekly chart, the index has formed a long bullish candle forming higher High-low compare to previous week and has closed above previous week's high indicating positive bias. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart, indicating positive bias.
The chart pattern suggests that if Bank Nifty crosses and sustains above 30,450 level, it would witness buying that would lead the index towards 31,000-31,300 levels. However, if index breaks below 29,980 level, it would witness selling which would take the index towards 29,700-29,400.
Bank Nifty is trading above 20, 50, and 100 and 200 day SMA's which are important short term moving averages, indicating negative bias in the short to medium term. Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy.
For the week, we expect Bank Nifty to trade in the range of 30,200-29,700 with a positive bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.
Option Data: Bank Nifty PCR stands at 1.31, while Max Pain Strike is 30,200.
Highest OI of 31,000 CE stands at 5.93 lakh, 30,500 at 3.12 lakh shares.
Addition on Call side was observed in 31,000 CE at 1.97 lakh shares, 31,500 at 1.42 lakh shares
Unwinding: 30,000 at 0.40 lakh shares.
Highest OI 29,500 PE at 4.91 lakh, followed by 30,000 PE at 4.69 lakh shares. Addition on Put side was observed in 29,500 PE at 2.60 lakh shares, 30,000 PE at 2.14 lakh shares.
Ipca Laboratories | Buying Range: Rs 1,010-990 | Stoploss: Rs 955 | Target: Rs 1,090-1,120 | Return: 9-12 percent
On the weekly chart, the stock price has decisively broken out from its consolidation range of Rs 900-1,000 on closing basis and sustaining above the same. This breakout has accompanied with an increase in volumes, which supports bullish sentiments ahead.
The weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in near term. Stock price is sustaining well above its 20 and 50 and 100 day SMA which supports bullish sentiments ahead.
Bajaj Finserv | Buying Range: Rs 8,390-8,230 | Stoploss: Rs 8,000 | Target: Rs 8,930-9,050 | Return: 7-9 percent
On the daily chart, the stock price has decisively broken out from its “Down-sloping channel” on a closing basis and sustaining above the same.
This breakout has accompanied with an increase in volumes that supports bullish sentiments ahead.
The daily strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in near term. Stock price is sustaining well above its 20 and 50 and 100 day SMA which supports bullish sentiments ahead.
Tata Chemicals | Buying Range: Rs 630-618 | Stoploss: Rs 605 | Target: Rs 662-674 | Return: 6-8 percent
On the daily chart, the stock price has made “Inverse Head & Shoulder” pattern and broke neckline levels of Rs 620-625 on a closing basis and sustaining above the same. This breakout has accompanied with an increase in volumes which supports bullish sentiments ahead.
The daily, as well as weekly strength indicator RSI and the momentum indicator Stochastic are both in positive territory which supports upside momentum to continue in near term. Stock price is sustaining well above its 20 and 50 and 100 day SMA, which supports bullish sentiments ahead.
Jindal Steel | Buying Range: Rs 121-119 | Stoploss: Rs 111 | Target: Rs 132- 138 | Return: 10-15 percent
On the daily chart stock price has made “Double Bottom” pattern and broke neckline levels of Rs 115-118 on a closing basis and sustaining above the same. This breakout has been accompanied with an increase in volumes which supports bullish sentiments ahead.
The daily as well as weekly strength indicator RSI and the momentum indicator Stochastic are both in positive territory, which supports the upside momentum to continue in the near term. Stock price is sustaining well above its 20 and 50 and 100 day SMA, which supports bullish sentiments ahead.
(The author is DGM - Research (Head Technical & Derivatives Research) at Axis Securities)
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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