Benchmark index Nifty closed in spinning top on the weekly chart and formed a Doji pattern on daily chart which indicates indecision ahead. A strong move is needed to be decisive. Still holding above 200 DMA gives a bias to bulls. Technically, 10550-10650 is a key support area. We suggest limited aggressive trade and awaiting clarity over the next move.
Although the market traded within a narrow range of 200 points last week, the index value has gradually gone up. The Index price extended the upward move for straight fourth week amid grid and fear factor. The surge in coronavirus case and corporates earning’s cautiousness capped the rally around 10850.
Last week Nifty 50 closed 1.52 percent higher, Mixed performance was seen from other major indices. Financial benchmarked performed well. Throughout the week market breadth has remained positive and METAL AND FINANCIAL scripts topped the market followed by AUTO, ENERGY & pharma.
In the coming week focus will be on macroeconomic data earnings announcements. Needless to say, global cues and updates related to COVID-19 will also remain on their radar.
Weekly & daily technical view on Nifty
Spinning Top on a weekly scale and Doji on Daily indicates indecision ahead.
A spinning top is a sign of indecision because the long upper and lower shadows didn’t result in a meaningful change in price between the open and close. The bulls pushed the price sharply higher and the bears sent the price sharply lower, but at the end, the price closed near where it opened.
This indecision can signal more sideways movement, especially if the spinning top occurs within an established range. It can also signal a possible price reversal if it occurs following a price advance or decline.
Trend- Both indecisive patterns suggest we need a strong candle to be decisive for the next move. The price has surpassed 50 EMAs and holding it well on a weekly scale. On a daily chart, it has been trading above 200 DMA which further indicates bull dominance in the market ahead. Technically above 10500, it has a target of 11000. Immediate resistance lays down at 10850. Any closed above 10850 will fuel it for the next target of 11000-11150.
According to Open Interest Data, the Maximum Call open interest stand at 11000 followed by 10800 and Put at 10000 followed by 10600 suggests a narrow trading range for the index. PCR stands at 10700 validate it as an immediate support level.
Nifty future strategy for the week
Support 10500, Resistance 10850
If index price unable to breach 10850 on a closing basis, then we may expect a profit booking from higher levels.
Any panic above 10500 would be a buying opportunity with a stop loss of 10300 for a target of 10800-11050.
Nifty future strategy for the day
Support 10690, Resistance 10820
Either side of the move will give the next 80-120 in the respective direction.
Weekly and daily technical view on Nifty Bank
On the other hand, financial benchmark index Bank Nifty performed well in respect to other benchmark indices. Majorly, the move was led by PSU banks.
Technical- Index price has taken a resistance of 23000 throughout the week and support around 22000. Either side of holding would suggest the next trend for 1000-1500 points.
Trend Price has recovered with the “Double Bottom” bullish price pattern which indicates a target of 26500 in upcoming trading sessions. Immediate resistance lay down at 23000. Trading above 23000 will lead it for 23900-25200-26500. Any panic above 19500 would be a holding buying opportunity.
Bank Nifty future strategy for the week
Support 22000, Resistance 23000
Either side of the breakout will give the next 800-1200 points in the respective direction.
Bank Nifty Future strategy for the day
Support at 22300 and Resistance at 22600
Sell at any pullback around 22600 with an ultimate stop loss of 23000 for downside targets of 22300-22000.
Nifty FMCG is ready for the fresh bull run
After a short consolidation, Nifty FMCG is ready for the fresh bull run in the coming days. Factors such as the unlock process, improvement in economic activity will support this sector to outperform. For the upcoming days, Nifty FMCG will be the lead runner in this situation.
On the technical front, Nifty FMCG consolidates in a narrow-range and ready to break its hurdle level. Now resistance around 30920, break and close above 30920 will take it to 31400 and then to 31800 levels in days to come. Momentum indicator RSI too supports our positive view in this sector. Support around 30400, break and close below 30400 will negate our positive view in this sector.
Stocks to keep an eye this week are:
Colpal – Stock is ready to exit from a range for a fresh bull run. Hurdle around 1405, break and close above 1405 will take it to 1450 and then to 1470 levels in days to come. Support and stop loss below 1455 on a closing basis.
Hindunilvr – Stock looks attractive on the daily chart. Traders can enter around 2200 for the upside rally till 2300 and then to 2350 levels in days to come. Support and stop loss below 2100 on a closing basis.
Top Stock Recommendations for tomorrow (13th July 2020)
Grab it around 108 as stock formed a bullish pattern in the past session. Traders can go for buying around 108 for the sharp upside move till 120 and then to 125 levels in days to come.
Support and stop loss below 98.
Grab this stock above 642 as the stock gives a sharp breakout above 642 levels on the weekly chart.
Traders can buy McDowell above 642 with a stop loss below 620 on a closing basis for an upside target of 670 +++ levels in days to come.
The stock looks positive on the weekly chart. Catch it around 160 levels.
Traders can buy Hindalco around 160 with a stop loss below 152 on a closing basis for an upside rally of 170—175 levels in the coming days.
Traders can trade safely with weekly levels of Nifty and Bank Nifty. More will update about stock specific and index during market hours.