Last week major benchmark index Nifty 50 corrected from the highs of 15044 and closed the week at around 14631 up around 4.32 percent over the previous week. The deadly cases of Coronavirus infections raise concerns over the business recovery. Nifty Pharma index continued to move up sharply, showing positive bias in heavyweights. The large trend will be on the upside as long as the Nifty is able to hold on to 14,200 and intermittent dips should be used to accumulate quality stocks.
Stock Market Summary
As FII’ tends to be cautious with their investments, sentiments point towards a slow economic recovery due to Covid tension and delayed vaccination drive that would not be good news for the markets. As the bumpy ride in the economy continues, Sensex and Nifty recovered and were up by 4.52 percent and 4.32 percent respectively. The small-cap and midcap index bounced back and were up by 3.41 percent and 3.82 percent this week respectively. The Auto index continued to remain under pressure, heavyweights of the sectors struggled amid restriction due to rising Covid-19 cases and the announcement of quarterly earnings.
The Nifty IT index continues to be steady. Metal index tops almost 10 percent as stellar buying sentiments were seen in heavyweights. Despite weak markets amid global and domestic cues, Nifty Pharma stocks were trading in the green. The market is taking cues from the second wave of experience of other countries where the Covid second wave curve flattened and fell in around two months.
Investments by Foreign Institutional Investors failed to match up to investment by Domestic Institutional Investors. The trading data showed that the FIIs were the net sellers and DIIs were the net buyers.
Now, what’s ahead ????
After a positive start for the week, Nifty cooled off from the highs. Despite the weakness seen on Friday, the advance-decline ratio was positive and the Nifty did not go towards the recent lows. Hopes of an early resolution of the Covid issue and encouraging corporate results will keep the markets afloat. 15200—14200 Is the band for the near term for the Nifty.
Events that may add volatility, Need to be watched
State Election results – Winning or Loosing of BJP will impact market sentiments broadly.
*03rd May 2021-Monday Nikkei Markit Manufacturing PMI (Apr)
*03rd May 2021, Monday – Trade Balance, Export, Import.
*05th May 2021, Wednesday – Nikkei Services PMI (Apr)
*06th May 2021, Thursday – Weekly Expiry
*07th May 2021-Friday – Bank Loan Growth, Deposit Growth, FX Reserves, USD
*FII and DII participation
Technical View on Nifty and Bank Nifty
Nifty ended slightly higher. DOJI candlestick on the weekly chart suggests, the index is clueless for the direction. The RSI, the leading indicator is moving in higher lows and higher highs fashion and is at just arm’s length to the 50 zones, this indicates some positive strength on the markets. Nifty has also closed above the short-term moving averages, 8DMA, 13-DMA, 20-DMA. There are several resistances in the 15055—15200 zone. If Nifty is able to clear all its resistances, it will gain bullish strength. Above the 15200 levels, the targets are open towards 15500.
Looking at the current structure, the market may witness selling pressure in the zone of 14900—15055. Any close above 15055 would be an indication of a trend reversal signal. Also, the 14400 levels can act as a support for the short term. Any close below the 14150 levels would mean markets are headed towards 13900—13600 levels.
F&O Analysis : Nifty PCR is at 1.07 while Bank Nifty PCR at 0.82. Maximum CE open interest stand at 14900 followed by 14800 and the maximum PE at 14400 indicates a range of trading in the upcoming session. Valuation wise maximum CE & PE stand at 14600 & 14700 is a crucial level for the index.
Nifty Futures Strategy for the day
Resistance comes at 15046 and support lays down at 14448.
Strategy – Fresh sell below 14448 for the target of 14300—14150 or else it could test its resistance level of 14950—15046 on the upside.
Financial Index Bank Nifty too formed DOJI Candle on a weekly scale, with a long upper shadow, suggesting selling pressure from the highs. The index needs to hold above the immediate support of 31800—32200 for a continued move higher, else a further correction is likely to come in the coming week that could take the bank nifty index down towards the 30000—29200 levels.
Bank Nifty Futures strategy for the day
Support at 31600 and Resistance at 34085.
Strategy : Either side breakout will give the next 500—80 points in the respective direction.
Nifty Metal outshined and expect a further rise
Bulls are leading in the nifty metal and momentum likely to continue and we can expect a major rally again in nifty metal in the next week. All the major stocks of this sector have performed well in the last few days.
Nifty Metal has its support at 4600 and resistance at 5000.
Technically above 5000 Nifty Metal continues its rally for the target of 5400–5500. If nifty metal manages to close above 5000 then we will see a sharp upside move till 5400 and then to 5500++ levels in days to come. It has its support at 4600, a break below 4600 will negate our positive view in this sector.
Stocks like Jindal Steel and Aplapollo look bullish on the chart and we will expect an upside move in the coming days.
Jindal Steel – Traders can go long around 440 for the upside to move till 480 and then to 520 levels in days to come. Support and stop loss below 400 on a closing basis.
AplApollo- Stock has formed a bullish candle on the weekly chart and ready for a fresh breakout. Hurdle at 1345, a break and close above 1345 will test 1500, and then to 1560 levels in days to come. Support at 1190, our positive view will negate below 1190 levels.
Trade with the levels only.
Top Stocks Recommendations
Stock has given breakout on the daily charts and closed above the 100-DMA line. Traders are advised to go for buying around 1125 levels for the upside target of 1190 and then to 1230 levels in the days to come.
Support and stop-loss remain at 1170 levels on a closing basis.
Technical Analysis:- Stock is trading in a consolidation phase and ready for a fresh breakout on the daily chart. RSI oscillator showing positive buying in it. The stock has its support at 745 and resistance at 800 levels. If price break and sustain above 800 will take it to 860–880++ levels in days to come.
Trade Idea:- Based on the daily chart study, traders and investors can go for buying above 800 for the upside target of 860–880++ levels with stop loss below 745 on a closing basis.
Trade with the levels only.
Traders can trade safely in Nifty and Bank Nifty and given stock recommendations with levels only. To get real time stock market news, updates and recommendations on your WhatsApp, click on the banner given below.
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