The domestic equity benchmark indices ended with modest losses on Monday and ended lower for the fourth straight day, mirroring weak global stocks. Index heavyweight Reliance Industries fell over 4%. Banks, metals, and Oil & Gas stocks also felt the most. Declines in stocks in Asia and Europe, due to concerns about global growth following lockdowns in China and aggressive policy tightening from central banks, also kept Indian Markets under pressure. Broader markets fared worse than benchmarks with most midcap and small-cap indices ending nearly 2% lower.
We’re not seeing any respite in the global markets, especially the US, and we’re largely reflecting the same trend at our end too. Besides, mixed Q4 earnings are further adding to the negativity, participants should continue with a cautious approach and stick with the stock-specific trading approach.
Market Summary
Nifty (down 0.67%) – Open 16227.70, High 16403.70, Low 16142.10, Close 16301.85
Bank Nifty (down 0.91%) – Open 34091.75, High 34554.35, Low 33927.20, Close 34275.40
Sensex (down 0.67%) – Open 54188.21, High 54795.47, Low 53918.02, Close 54470.67
India VIX – up 3.68% to end at 22.0325 levels
Bullish Sectors – IT (+0.05%)
Bearish Sectors – ENERGY (-3.68%), MEDIA (-2.65%)
Top Gainers Stocks – POWERGRID (+2.83%), HCLTECH (+2.47%)
Top Losers Stocks – RELIANCE (-3.91%), NESTLE (-2.89%)
FII’s: Net Sellers : ( – 3361.80 Crores )
DII’s: Net Buyers : ( + 3077.24 Crores )
Nifty Open Interest Put Call Ratio (PCR): 0.60
Maximum CE Open Interest Strike: 17000
Maximum PE Open Interest Strike: 16000
Bank Nifty Open Interest Put Call Ratio (PCR): 0.60
Maximum CE Open Interest Strike: 36000
Maximum PE Open Interest Strike: 34000
(The maximum CE PE open interest strike rate indicates that the market is likely to move in that particular range in the coming days)
Technical View of Benchmark Indices
Nifty
The Nifty index opened on a negative note tracking news flow on the Russia-Ukraine invasion, but it showed some recovery during the day.
During the day bulls claimed 17200 as the important support zone, and the index finds it difficult to sustain below that level.
Though the ADX (Average Directional Index) on the hourly charts shows a reading above the 30, which suggests that the downward momentum has not weakened.
Our Sell on rise strategy which we have suggested in our weekly report is still intact until proven otherwise.
Continuous lower highs and lower lows are still intact on the chart, with the 20 and 200-period Simple Moving Average pointing towards the downside.
Daily CPR is continuously forming lower value relationships on the charts.
Now, what to expect?
Sustainable trading action below 16200 on the Nifty Futures may take it downwards towards 16100 and then to 16000 levels, while on the upside a move above 16400 may take it towards 16550 and then to 16650.
Bank Nifty
Like the Nifty, the Bank Nifty index also plunged in the opening session, tracking interest rates hike, and continuous FII selling.
PSU and Private Banks have also put pressure on the index with the AU Bank and, INDUSIND Bank being the worst hit.
Though some buying interest was seen during the day the index remains in the short-term downtrend.
The 20 period MA also continues to trade below the 50 period MA which indicates the negative moving average crossover is still intact.
We, therefore, feel this is a sell on rise market till proved otherwise.
Now, what to expect?
Bank Nifty Future has support at 34000 if breaks and sustain below that level then it will take it towards 33800–33550 levels. Resistance at 34500 breaks and sustains above this will take it to 34850–35040 levels.
Top Stock Picks for today (10th May 2022)
EDELWEISS (CASH)
Stock is consolidating for a long time and formed a type of “TRIANGLE” pattern. If break and sustain above given levels, we may expect a good up move in a shorter time frame
Strategy – Traders can grab EDELWEISS above 58.50 for a target of 60 and then 63 in the coming days. Support and stop loss below 57 on a closing basis.
INFY (FUTURES)
The stock has formed a channel pattern and is ready to give a breakout on the upside, we may expect a good up move in a shorter time frame.
Strategy – Traders can grab INFY Futures above 1590 for the targets of 1630 & then 1660 in the coming days. Support and stop loss below 1550 on a closing basis.
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