Last week, Indian Benchmark Indices settled in the green territory and closed with strong gains on Dalal Street. Nifty 50 outperforms as compared to the Bank Nifty index. Metal stocks outshine the market and trading at all-time highs. 15055 could be crucial for the Nifty 50, close above the resistance level of 15055 will take the index towards the north direction. DIIs continued to remain bullish for the markets. Covid vaccination drive, as well as strong corporate earnings, will keep the market positive for time being. We will see earning impact in most companies after the 1st quarter of 2021.
Dalal Street Summary
Nifty Metal index was one of the top sectoral gainers this week. Metal company stocks continued their rising spree as metal prices touch record highs in the hopes of the global economic recovery from the rapid surge in the Covid-19 pandemic. Base metals were higher in the commodities markets. Corporate earnings and demand rebound expectations also lifted the sector on Indian Stock exchanges. Along with metal, Nifty Pharma Index has moved up sharply without significant retracement as the breakout for the upward move was strong. Benchmark index Nifty and Bank Nifty remained elevated amid rising Covid-19 cases. Sentiments was lifted after the RBI announced that it would give special allowances and perks for Banks who will help the priority sector to lend money. Overall all banking sectors welcomed this news.
Nifty IT joins markets bullish bandwagon, amid positive global cues and hopes of recovery through vaccine drive helped bulls to put up a strong show. Nifty IT was in the fast lane. Except May 06 FIIs were the major sellers whereas, DIIs were the net buyers this week. Institutional data showing a kind of indecision in the markets. But stock-specific action will likely continue.
Now, what’s ahead in the next week???
Nifty defends its near-term support level of 14,400. The failed upside breakout attempt of upper range of 15000 seems to have dampened the efforts of the bull. The overall setup from smaller to larger time frame signals chances for upside bounce in the markets from the lower levels and a formation of higher bottom from the support level of 14500—14400 levels could be seen as positive for the markets. On the upside 15055 is likely to act as a hurdle.
Events that may add volatility, need to be watched this week are:
*12th May 2021-Wednesday CPI (YoY) (Apr)
* 12th May 2021, Wednesday – Industrial Production(YoY) (Mar)
*13th May 2021, Thursday – Holiday – Eid Ul Fitr
*14th May 2021, Friday – WPI Inflation (YoY)
* 14th May 2021-Friday – WPI FOOD, FUEL
*FII and DII participation in Dalal Street
Technical View of Dalal Street
Nifty formed a solid green candle on the weekly scale within the previous candle, suggesting that bulls are fighting for their control. As observed on the Nifty weekly chart, the price has managed to defend key supports near the 14400 marks. Amid mostly range play this week, traders are awaiting a strong catalyst for the next direction of prices. Relative Strength Index (RSI) is edging higher within the overbought region, continuing to favor upside movements.
Nifty forming a pennant pattern on the chart, major resistance stands out at 15055 levels, a breakout above the range will decide the further bullishness of the index. The key moving averages 8-DMA and 20- DMA are sloping upwards. The squeezing Bollinger bands are flagging that volatility is currently at low levels, but a significant advance or decline could develop in the subsequent sessions.
In this background, wait for a decisive close above 15055 for a bigger move. Avoid short positions for now. Look for a close below the support level of 14400 for a bearish signal. Until then be with a positive bias in the market. Most of the world market indices are also in a similar pattern. The cues may come from the global markets too. So keep watch on it and be careful.
Nifty Futures strategy for the day
Resistance comes at 14900 and support lays down at 14750.
Strategy – Fresh sell below 14750 for the target of 14600—14500 or Else it could test its resistance level of 14900—15055 on the upside.
Bank Nifty index remained range-bound after the most part of the week amid RBI Governor announced key measures to boost the economy. The index managed to close on a positive note.
Technically on the weekly chart, support lies down at 31900 levels, whereas resistance on the upside is capped around 33000—33200. If Bank Nifty index breaches support on the lower side then it would be slid towards the 30600 and if breaches resistance on the upside and closes above it, we may see a fresh breakout and the index can head towards a higher level around 34200. Currently, the Nifty Bank index is trading above 200-EMA and suggests the long-term trend is bullish.
Nifty Bank Futures strategy for the day
Resistance at 33000 and Support at 32600
Strategy – Either buy above 33000 for the target of 33400—34000 or Sell below 32600 for the downside target of 32200—31800.
Nifty Energy is likely to trade in the broad range and looks set to rally in the coming days
Bulls managed to push Nifty energy upside and likely to continue their move. We may expect a major rally in the sector in next week. The stochastic and RSI oscillator has been supporting our bullish view also.
Nifty Energy has its support at 17600 and resistance at 18500 levels.
Technically above 18500 Nifty Energy continues its rally for the target of 19500–20000. If Nifty energy manages to close above 18500 then we will see a sharp upside move till 19500 and then to 20000++ levels in days to come. It has its support at 17600, a breakdown below 17600 will negate our positive view in this sector.
Stocks like GAIL and NTPC look bullish on the chart and we expect an upside move in the coming days.
GAIL – Traders can go long at around 150 for the upside move till 160 and then to 170 levels in days to come. Support and stop loss below 142 on a closing basis.
NTPC – Stock has formed a bullish candle on the weekly chart and ready for a fresh breakout. Hurdle at 106. Break and close above 106 will test 112, and then to 115 levels in days to come. Support at 101, our positive view will negate below 101 levels.
Trade with the levels only.
Top Stocks Recommendations
The stock has taken support of the trendline offering a good risk-reward ratio. Traders are advised to do buying around 2890 levels for the upside target of 3000 and then to 3100 levels in the days to come.
Support and stop-loss remain at 2800 levels on a closing basis.
Technical Analysis:- The stock has formed a bullish “Marubozu” candlestick pattern on the weekly chart. And “Super trend in standard 10,4 and 10,3 indicators are also suggesting the positive side momentum signal and Stochastic oscillator showing positive buying in it. The stock has its support around 415 and resistance around 450 levels.
Trade Idea:- Based on the daily chart study, traders and investors can go for buying above 450 for the upside target of 485–490++ levels with stop loss below 415 on a closing basis.
Trade with the levels only.
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