On the options front, 10,600 and 10,700 strikes witnessed Call writing whereas Put unwinding was seen in 10,600, 10,500 and 10,400 strike prices which indicates we may drift lower towards 10,400 ahead of November series expiry, Rajesh Palviya, Head Technical & Derivatives Analyst, Axis Securities, said in an interview with Moneycontrol’s Kshitij Anand.
Q. The Nifty which had reclaimed 200-DMA came under selling pressure after reclaiming 10,700. What is the sense you are getting?
A. The Nifty failed to cross its 200-DMA during the week and witnessed selling pressure from the higher level. The market remained volatile due to news around state election and global negative cues.
The Nifty witnessed weakness for the third consecutive day by forming lower highs and lower lows formation and corrected almost 250 points from the weekly high of 10,774.
During the week, most of the large-cap stocks witnessed the corrective action. As long as Nifty remains below 10,700-10,750, Nifty is likely to remain rangebound in the near term and would likely face stiff resistance around 10,700 for any pullback action.
We expect the market to trade in the range of 10,350 -10,700. The market will witness the pain of consolidation for a few more weeks.
Q. How are markets looking on the weekly charts? Considering we got expiry next, is it time to buy, sell or hold?
A. On the weekly chart, the Nifty has formed a Bearish Engulfing Pattern which indicates supply throughout the week; hence, we may witness more weakness ahead.
The Nifty has important support placed at 10,480 which coincides with 20-day SMA, if it breaches that level, it may slide towards 10,400 before the expiry.
On the options front, 10,600 and 10,700 strikes witnessed Call writing whereas Put unwinding was seen in 10,600, 10,500 and 10,400 strike prices which indicates we may drift lower towards 10400 ahead of November series expiry.
India VIX is trading at 19.15, which indicates volatile up and down swing to continue in the market in the near-term till it does not cool down below 17-15 levels. We expect November series expiry to be in the range of 10,450-10,550.
Q. What is your view on Nifty Bank?
A. Bank Nifty failed to cross above 26,250 (previous week close) and witnessed supply pressure on the higher side and corrected to close near 26,000.
The Bank Nifty outperformed the Nifty and held above 50 and 200-day SMA and formed higher high and higher low formation compared to previous week which indicates bullishness is still intact.
The chart pattern indicates 25,900-25,750 zone is likely to act good support levels for minor corrective action in the near-term while 26,250-26,400 is the resistance zone.
We have witnessed mix behaviour in the banking stocks during the week. Options data indicates 25,900 Put strike has the highest concentration and is likely to act as crucial support while 26,200 has the highest Call concentration which would likely to act as resistance ahead of expiry.
Q. Any stocks which investors can look at for the coming week for a minimum holding period of one month?
A. Here is a list of top four stocks which could give 4-8 perent return in the next one month:
Chambal Fertilisers & Chemicals : Buy| CMP: Rs 151| Target: Rs 161| Stop loss: 141| Return: 6 percent
On the daily chart, the stock price has decisively broken out from its consolidation range of Rs 149-140 on a closing basis and has sustained above the same. This breakout is accompanied by an increase in volumes which supports bullish sentiments ahead.
The weekly and daily strength indicator RSI and the momentum indicator Stochastic both are in positive terrain which supports the upside momentum to continue in the near term.
The stock price has given a positive crossover from its 50 and 100-day SMA which supports bullish sentiments ahead.
ZEE Entertainment Enterprises: Buy| CMP: Rs 457.25| Target: Rs 478| Stop loss: Rs 439| Return: 4 percent
On the daily chart, the stock price has given a "Triangle" pattern breakout - a short-term reversal pattern which signals a shift of short-term trend reversal to the upside.
This breakout is accompanied with a huge spurt in volumes which supports bullish sentiments ahead. The weekly and daily strength indicator RSI and the momentum indicator Stochastic both are in positive terrain which supports upside momentum to continue in near term.
The stock price has given positive crossover from its 20 and 50-day SMA which supports the bullish sentiments ahead.
Capital First: Buy| LTP: Rs 534| Target: Rs 558| Stop loss: Rs 508| Return: 5 percent
On the daily chart, the stock price has decisively broken out from its consolidation range of Rs 500-450 on a closing basis and has sustained above the same.
This breakout is accompanied with an increase in volumes which supports bullish sentiments ahead. On the weekly chart, the stock price has formed a rounding bottom pattern indicating positive bias.
The weekly and daily strength indicator RSI and the momentum indicator Stochastic both have given positive crossover which supports upside momentum to continue in near term.
The stock price has given a positive crossover from its 50 and 100-day SMA which supports bullish sentiments ahead.
Jindal Saw: Buy| LTP: Rs 83.40| Target: Rs 90| Stop Loss: Rs 78| Return: 8 percent
On the daily chart, the stock price is moving in an up sloping channel. It has bounced back from the support zone and is moving inside the channel on a closing basis.
This bounce back is accompanied by a huge spurt in volumes which supports bullish sentiments ahead. The daily strength indicator RSI and the momentum indicator Stochastic both have given positive crossover from the oversold region which supports upside momentum to continue in near term.
The stock price has given positive crossover from its 20, 50 and 100-day SMA which supports bullish sentiments ahead.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol are their own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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