Last week market witnessed a positive week with the benchmark index Nifty 50 hitting fresh lifetime highs. Bank Nifty could see a breakout above 35500 levels and rally towards its previous highs. IT index was the top outperformer of the week, whereas, the metal index traded on a subdued note. FII action was primarily seen in the stock futures segment. Private as well as PSU leaders started the June series near their highest Call bases. Most cement stocks remained in a range and consolidated in the expiry week.
Stock Market Summary
Last week we have witnessed a spectacular recovery in the market. Nifty 50 started it’s upward journey from week’s beginning itself. If we see the technical chart we can observe Nifty made higher highs and higher lows pattern on daily chart. Started it’s week from 15211, it made a high of 15469.65 and finally settled at 15435 on Friday. Nifty has breached it’s previous high of 15435 which was made on 16th Feb 2021 and gave week’s closing near to that levels only.
Sensex too followed it’s upward trend and finally settled at 51477 which is almost 900 points up move from it’s last week’s closing. But if we look at daily daily chart of Bank Nifty we will find out that despite an upward move and closed above previous week’s close. Bank Nifty faced a strong hurdle near 35200–35225 zone for the first 4 days of week i.e. from Monday to Thursday and finally closed at 35141. Over all it gave a net upward move of 535 points from last week’s closing to this week week’s closing.
On Friday, Reliance Industries stock climbed 6.01% which overall boosted Nifty 50 and market sentiments. Grasim and Adani Ports were also among top performers while Sun pharma was the major looser (-4.29%) among Nifty 50 stocks of Friday’s trading session.
Now, what’s ahead in coming week??
Nifty 50 closed at record highs. Weekly price action formed a high wave candle, indicating elevated volatility near lifetime highs. The broader market maintained relative outperformance wherein the Nifty small-cap index recorded a fresh 52- week high. The outperformance in the broader market indices has been backed by improving market breadth. Structurally, the formation of higher high-low signifies elevated buying demand that makes us confident to revise the support base around 14750. In the coming session, we expect index to trade with positive bias. Hence, use intraday dip towards 15200—15400 to create long for the target of 16000 and 16300 in the coming weeks.
Events that may add volatility, Need to be watched this week:
*1st June 2021-Tuesday – Manufacturing PMI (May)
* 1st June 2021-Tuesday – CPI (YoY) (May)
*3rd June 2021-Thursday – Composite PMI (May)
*4th June 2021-Friday – Interest Rate Decision
*FII and DII participation
Technical View on Nifty and Bank Nifty
Nifty has finally broken out its previous high, which indicates fresh momentum buying for the medium to long term. It is sort of trading in the consolidation zone for the last three months and the range has been 14150—15431. This range is now taken out on a closing basis and markets are all set to extend the gains. We could see a sharp-up move with high momentum in a short span of time. Nifty has been forming higher tops and higher bottoms on weekly charts. The Weekly RSI oscillator has also been registering higher tops and higher bottoms, which confirms the bullish trend, and also weekly ADX has crossed –DI line on the upside, which indicates the fresh buy signal for the medium-term in the Nifty.
Looking at the options front, sustainability of 15200 will be crucial in the short-term as it is the highest Put base for weekly settlement. On the other hand, a move above 15500, may open room for continued momentum. On the rollover front, Nifty has started new series with relatively high open interest in the June series.
To conclude, Nifty has surpassed the crucial resistance of 15431. Market could see momentum buying in a short span of time. Next upside targets are seen at 16000 and 16300. Longs should be protected with 14750 stop-loss in Nifty.
Nifty Futures strategy for the day
Resistance comes at 15550 and support lays down at 15300.
Strategy – Fresh buy above 15550 for the target of 15650—15700 on the upside, or Else it could test its support level of 15300.
Nifty Bank remained volatile throughout the week. A mixed sentiment was witnessed among investors for the sector, however, the losses were limited. The weekly price action formed a sort of DOJI candle, the index has sustained above its recent breakout area signaling strength. Extended rally and shallow correction highlight a positive price structure. We expect index to maintain positive bias and head towards 37000 levels which are close to its previous highs.
The index is also trading above its 20-DMA which suggests it could move higher in near term. RSI 14 on the weekly chart has now gone above 60 levels which indicates strong momentum. The formation of a higher high-low on the weekly chart signifies elevated buying demand that makes us assured to revise the support base higher towards 33000 levels as it is a confluence of 61.8% retracement of the current up move (32115-35216).
Nifty Bank Futures strategy for the day
Resistance at 35500 and Support at 34500
Strategy – Either Buy above 35550 for the target of 36000—36500 or Sell below 34500 for the downside target of 33500.
Nifty Infrastructure is primed for another leg of the rally
Nifty Infrastructure has given a powerful breakout on the weekly chart. It has shown an optimistic strength and it may witness further continuation to it’s upside rally if it manages to hold above 4320 levels. All the major stocks of this sector have performed well in the last few days.
Nifty Infrastructure has support at 4160 and resistance at 4320.
Technically above 4320, Nifty Infrastructure continues its rally for the target of 4480–4500. If it manages to close above 4320 then we will see a sharp upside move till 4480 and then to 4500++ levels in days to come. It has its support at 4160, a break below 4160 will negate our positive view in this sector.
Stocks like Exide Industries and DLF look bullish on the chart and we will expect an upside move in the coming days.
Exide Industries – Traders can go long above 193 for the upside to move till 205 and then to 210 levels in days to come. Support and stop loss below 185 on a closing basis.
DLF- The stock has formed a bullish candle on the weekly chart and ready for a fresh bull run. Traders can buy around 286–287 for the upside move till 296 and then to 306 levels in days to come. Support at 276, our positive view will negate below 276 levels.
Trade with the levels only.
Top Stocks Recommendations
The stock will likely give a fresh breakout above 135 levels. The relative Strength Index is above 70, showing strong buying strength. Traders are advised to do buying above 135 for the upside target of 160 and then to 180 levels in the days to come.
Support and stop-loss remain at 100 levels on a closing basis.
INTERGLOBE AVIATION LTD. (INDIGO, FUTURES)
Technical Analysis:- The stock has formed a bullish “Marubozu” candlestick pattern on the weekly chart. Indicators like the Supertrend of 10,3 and stochastic oscillator too support our bullish view in this stock. The stock has its support around 1670 and resistance around 1820 levels.
Trade idea:- Based on the daily chart study, traders and investors can go for buying Indigo stock on dip around 1750 for the upside target of 1820++ levels with stop loss below 1670 on a closing basis.
Trade with the levels only.
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