On the extension of lockdown and disappointment on a stimulus package, Nifty 50 plunged more than 300 points. Bank Nifty too tanked for more than 6.5%. Red Morubozu indicates, selling pressure is likely to continue in Indian indices.
Is it the start of BEAR turn again?
Indian benchmark indices closed lower on the first trading days of the week and ended lower for the third consecutive days after the Rs 20 lakh crore stimulus package announced by the Finance Minister over the weekend, failed to sustain the market. The BSE Sensex ended 3.44 percent lower to close at 30,028, while the NSE Nifty 50 closed at 8,823 to down 3.32 percent. On Nifty, 44 out of the 50 Nifty stocks ended with losses.
The market breadth was in favor of sellers. Around 580 shares have advanced, 1702 shares declined, and 159 shares are unchanged. Among sectoral indices, the Nifty Bank and the Nifty Media index ended with losses of over 6.5 percent while Nifty Auto and Nifty PSU Banking index fell 6 percent each. On the other hand, Nifty I.T. and Nifty Pharma outperformed, ending with modest gains on the Monday trading session.
Technical View on Bank Nifty and Nifty 50
As per expectation Nifty 50 continued its downfall and slide below 8850. The Nifty 50 price has formed a bearish Marabozu candle which suggests selling pressure likely to continue. At present level index is having a good resistance level at 9150 levels while support comes at 8700 levels.
According to Open Interest Data, the Maximum Call open interest stand at 9500, and Put at 850 suggests a broad trading range for the index.
Valuation wise maximum Call stands at 8900 & Put stand at 8800 indicates a crucial range for the index. PCR stands at 8800 validate it as an immediate support level.
Nifty (future) strategy for the day
Support lays down at 8800, while upside resistance comes at 8950.
Trading below 8800–8790 may extend its downtrend 8700—8650, else may test 8950 on the upside.
Above 8950 it may stretch for 9050—9120 on the upside
Sell It Below 8800 for downside targets.
On the other hand, Bank nifty too witnessed selling pressure throughout the day and slide below 18000 levels down by more than 1250 points from it’s previous close.
Below 19000, we are in the bear zone and every high would be considered as a selling opportunity in it.
Bank Nifty (future) strategy for the day
Support at 17500 and Resistance at 18000
Below 17000, the price may extend its downfall for 16800-16200 level.
Sell It below 17500, Price may test 16500 levels on the downside.
Maintain stop loss at 18200.
Holding above 18200, it may test a stretch for 18500—18800.
Top Stock Recommendations For Today (19th May 2020)
TORNT POWER (Future)
Sell this counter around 298 as the stock looks extremely weak on the chat.
Traders can sell around 298 with a stop loss above 305 levels on a closing basis for a downside target of 290—288 levels in days to come.
Stock is trading in a negative trend and below 990 will see panic sell-off on the chart.
Traders can sell bellow 990 with a stop loss above 1030 levels on a closing basis for a downside movement till 950—940 levels in the coming days.
The stock formed a bullish pattern on the daily chart. We will expect a sharp upside move-in days to come.
Traders can do buying above 86 for the sharp upside move till 95 and then to 100 levels in days to come. Support and stop loss below 79 on a closing basis.
Traders can trade safely with levels only. More will update during market hours