Nifty and Bank Nifty Support, Resistance, and Reversal Levels Along With Top Picks
Global and domestic equity markets witnessed a sharp decline last week as investors worried about growth expectations amid elevated inflation levels. Sensex 30 and Nifty 50 index was down more than 3%. BSE Midcap and BSE Smallcap index witnessed a higher correction in the range of 5-6%.
On the economic front, the CPI inflation in April 2022 surged to 7.79% (March 2022: 6.95%), while March 2022 IIP growth remained subdued at 1.9% (February 2022: 1.5%).
FII’s continued its selling of Indian equities this week. Rising bond yields, high inflation levels, and monetary policy tightening action by Central Banks globally will weigh on near-term sentiments which could keep markets volatile. Stock-specific action will continue due to the ongoing result season.
Now, what next?
In the very short term, the market tends to move in line with the global uncertainties but further fall can be an opportunity for long-term investors whereas short-term traders will be better off by limiting themselves to hedged positions.
Weekly Index update
Nifty (down 3.83%) – Open 16227.70, High 16404.55, Low 15735.75, Close 15782.15
Bank Nifty (down 4.25%) – Open 34091.75, High 34793.20, Low 33007.90, Close 33121.35
Sensex (down 3.72%) – Open 54188.21, High 54857.02, Low 52654.89, Close 52793.62
India Vix – up 10.52% to end at 23.4850 levels on a weekly basis
FII’s: Net Sellers: (-19967.57 Crores) weekly basis
DII’s: Net Buyers: (+18202.10Crores) weekly basis
Weekly Bullish Sectors – None of the sectors ended in green
Weekly Bearish Sectors – METAL (-12.29%), ENERGY (-10.09%)
Top Gainers Stocks of the week – BAJAJ AUTO (+4.07%), EICHER MOTORS (+2.97%)
Top Losers Stocks of the week – TATA STEEL (-14.54%), JSW STEEL (-13.03%)
Nifty Open Interest Put Call Ratio (PCR): 0.74
Maximum CE Open Interest Strike: 16000
Maximum PE Open Interest Strike: 15600
Bank Nifty Open Interest Put Call Ratio (PCR): 0.55
Maximum CE Open Interest Strike: 33500
Maximum PE Open Interest Strike: 33000
(The maximum CE PE open interest strike rate indicates that the market is likely to move in that particular range in the coming days)
Weekly and Intraday View of Nifty and Bank Nifty
A higher level of weakness has been seen throughout the week in the Nifty index, as it shifts into the decline from the starting of the week itself.
A red-bodied candle formed on the weekly chart, showing the power of the bears.
On the daily chart, the Nifty index closed near the 400-Period Simple Moving Average, which is the 15750 level. Now for the coming week, any sustainable move below this will lead to more downside in the index.
The larger degree of lower tops and bottoms is intact and the present weekly chart pattern signals a possibility of new lower bottom formation in the coming week.
There is a possibility of an upside bounce, but that will eventually lead to a fresh selling opportunity.
Weekly Support and Resistance (Spot Levels)
The short-term support for the Nifty is 15670, a sustainable move below this and we will see more selling pressure towards the downside that can take breadth around 15200 levels. And if we further broke that level then a major selling will come towards 15000.
On the upside, the resistance is at 16100—16270—-16400 and until we do not get past that, the current selling movement will likely continue.
Nifty Futures Strategy for Monday
Benchmark Index Nifty Future has resistance at 16100 if breaks and sustains above that level, then it will take it to 16180-16270.
Support at 15720 breaks and sustain below that level will take it towards 15650–15550.
As mentioned in our previous week’s blog that the breakdown of 200-MA is the bad news for the buyers, and this week bank nifty index has closed near fresh lows.
Earlier during the week, it is showing sort of strength in comparison to the Nifty, but after the inflation numbers were released, the index came into the back foot.
Now for the coming week, buyers may show some form of participation but as long as the price moves below the moving averages, making the lower tops and lower bottoms, the outlook is bearish.
Short-term momentum oscillators indicate a bearish bias. The RSI fluctuates near the 30 range in the selling area.
Similarly, MACD bars in the negative region are advancing below the signal line.
Weekly Support and Resistance (Spot Levels)
The short-term support for the Bank Nifty is 33000. If it breaks that level, then it could take the markets down to 32300—31500.
On the upside, the resistance is at 34000—34500 and until it do not get past that, the current selling movement will continue.
Bank Nifty Futures Strategy for Monday
Bank Nifty Future has resistance at 33200 if breaks and sustain above that level then it will take it to 33400–33550.
Support at 33000 breaks and sustain below that level then it will take it to 32800–32600 levels.
Weekly Sector Update
Nifty FMCG is building base for the fresh upside move
With the ongoing selling pressure in the markets, the Nifty FMCG sector is holding the support levels. Heavyweight stocks look strong in this sector.
Nifty FMCG has near resistance around 37500, break and sustain above 37500 will see sharp upside move till next hurdle to 38000. If able to cross 38000 then we will expect a huge breakout on the charts in the next trading sessions. Close above 38500 will see a non-stop rally till 39000+ levels in days to come.
Now major support is around 35800, break below 35800 will negate our bullish view in this sector.
Keep an eye on Hindustan Unilever, Colgate Palm(IND), and ITC.
Top Stock Picks For Upcoming Week
MAHINDRA HOLIDAYS (MHRIL, CASH)
Stock is trading near its resistance zone. If breaks and sustain above given levels then we may expect a good up move in a shorter time frame
Strategy – Traders can grab MHRIL above 238 for a target of 247 and then 255 in the coming days. Support and stop loss will be below 230 on a closing basis.
HUL Stocks has given a range breakout and now retesting the levels again and also formed decent support at lower levels, we may expect a good bounce from current levels.
Strategy -Traders can grab Hindunilvr Futures above 2210 for the targets of 2270 in the coming days. Support and stop loss below 2160 on a closing basis.
More will update daily on our blog. To get daily intraday technical levels and trading strategies in Nifty and Bank Nifty. Read our blog or follow us on WhatsApp or on Telegram.
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