Nifty 50 was down almost 2.50% in the previous week. Except for Nifty FMCG, all other sectors witnessed selling pressure in Indian Stock Market. Metal Index was among the top under performer as heavy profit booking weighed in. 14416 would remain the near-term support for the index. Upside breakout can be seen once only if Nifty sustain above 15000 levels. Bank Nifty saw a marginal unwinding of long positions. Dr. Reddy’s launched Russian Sputnik V in the Indian Market.
Stock Market Summary
India’s CPI Inflation contracted to 4.29% in April 2021, while the Index of Industrial Production(IIP) increased to 22.4% in March 2021. The downside in Indian Markets reflects the retail inflation data from the US and India as well. Metal index emerged as the top bears during the week dragging the benchmark Sensex and Nifty 50 the most. The Indian metal stocks tracked lower nonferrous metals prices at the Shanghai and London exchanges after the latest US inflation data for April indicated higher than expected price pressure. Nifty Pharma was among the top laggards sectors.
The second wave of Covid has dented sentiment and weakened the FY22 earning visibility as multiple states enter into extended lockdowns and restrictions. Nifty IT stocks were under sharp selling pressure amid a weakening in global tech stocks. However, global news flows and sector-specific development are the key monitorable. FMCG stocks emerged as the top bulls, the sector rises after the country’s retail inflation eases led by lower food prices. Nifty FMCG stocks index not only outperformed benchmark Nifty 50 but also other sectoral indices.
FIIs seen playing safe with betting on private banks, IT, and consumption whereas DIIs seen betting high on Cyclicals like Metals, Cement, Auto, and PSU Banks.
Now, what’s ahead ????
Nifty continues to hold above the rising trend line that has held the important lows of the last few months. This implies that the index remains in an intermediate uptrend. The Nifty made a higher bottom at 14416 which gave further evidence of the uptrend. Therefore, any correction would find support above 14416 levels. Upside breakout confirmation would come, once Nifty sustain above 15000 levels. Above 15000 levels Nifty could extend its gains towards new all-time highs above 15431.
Events that may add volatility to Indian Stock Market, Need to be watched this week are:
*17th May 2021, Monday WPI Manufacturing Inflation (YoY) (Apr.)
* 17th May 2021, Monday- WPI Food, Fuel (YoY) (Apr)
*19th May 2021, Wednesday – M3 Money Supply
* 20th May 2021, Thursday- Weekly Expiry
*21st May 2021-Friday- Deposit Growth, FX Reserves, Bank Loan Growth.
*FII and DII participation in Stock Market
* Corporate Quarterly results
We will publish Technical View of above mentioned stocks on our blog in the morning on their respective results date. So keep follow our blog on regular basis and stay updated about market. To get real time stock market updates on your WhatsApp. Click here!
Technical View of Nifty and Bank Nifty
Nifty is struggling to find any direction and it will not be a stretch statement to say that price has been in a narrow range between 14677.80—14966.80 during the previous week. A downward sloping channel can be seen on charts, trading in channel indicates that the market is passing through a consolidation phase. The trend remains choppy and directionless. A red candle can be seen on the weekly charts, that immediately does not indicates weakness in Nifty, because key moving averages supporting the index. 20-SMA is around 14400 levels which are going to be the near-term crucial support for the index.
Observing the last three weeks’ price action on weekly charts reveals that Nifty may be chalking out a consolidation range between 15,064 to 14,421 levels and it needs to emerge out of this trading range to witness a decisive move in either direction of the trend.
On the options front, maximum Put Open Interest witnessed at 14,000 followed by 13,500 strikes while maximum Call Open Interest was seen at 15,000 followed by 14,800 strikes. Call writing was seen at 15,100 and 15,300 strikes while Put writing was seen at 14,650 then 14,500 strikes. Option data indicated that nifty could see a wider trading range of 14,400 to 15,000 levels for coming sessions.
Nifty Futures strategy for the day
Resistance comes at 14800 and support lays down at 14580.
Strategy – Fresh sell below 14580 for the target of 14500–14450 or else it could test its resistance level of 14800—14900 on the upside.
Tracking the broader bearish markets tone, bank nifty continued to remain under selling pressure throughout the week. Heavyweights stocks weighing down on index, the most. Bank Nifty opened moderately higher around 33200 and traded with negative to range-bound bias for the most part of the week, the index closed with forming a bearish candle on the weekly chart. Financial benchmark index has to cross and hold above 33500 to witness an up move towards 34000 and 35100 while on the downside support is seen at 32000 and 30800 levels.
Momentum oscillators like RSI have turned downwards which suggests that the index could move lower in the near term.
If the index traded below 31000 levels in coming sessions then traders may see downside panic till 29500. Resistance is seen at 33500.
Nifty Bank Futures strategy for the day
Resistance at 33000 and Support at 31800
Strategy – Either Buy above 33000 for the target of 33500—34000 or sell below 31800 for the downside target of 31000.
Nifty FMCG is showing bullish sentiments and look well poised in the coming days for good upside move
Stock Market bulls likely to engaged in Nifty FMCG. Nifty FMCG looks optimistic and formed green candle by given fresh upside breakout in the next week. The stochastic RSI oscillator also supporting our positive view in this sector.
Nifty FMCG has its support at 33900 and resistance at 34900 levels.
Technically above 34900 Nifty FMCG continues its rally for the target of 35800–36200. If it manages to close above 34900 then we will see a sharp upside move till 35900 and then to 36200++ levels in days to come. A break below 33900 will negate our positive view in this sector.
Stocks like ITC and Emami Ltd. look bullish on the chart and we will expect an upside move in the coming days.
EMAMI LTD – Traders can go long above 506 for the upside to move till 550 and then to 560 levels in days to come. Support and stop loss below 470 on a closing basis.
ITC – Stock has formed a bullish candle on the weekly chart and ready for a fresh breakout. Hurdle at 214, a break and close above 214 will test, and then to 222 levels in days to come. Support at 196, our positive view will negate below 196 levels.
Trade with the levels only.
Top Stocks Recommendations
SWARAJ ENGINES (Cash)
The stock price is making higher highs and higher lows supported by volume, momentum indicator MACD has also given bullish divergence on the weekly charts. Traders are advised to do buying around 1550 levels for the upside target of 1700 and then to 1870 levels in the days to come.
Support and stop-loss remain at 1424 levels on a closing basis.
Technical Analysis – Nifty FMCG index in the fast lane and escaped market bearish tone.
The stock has formed a bullish hammer 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 3320 and resistance around 3530 levels.
Trade Idea:- Based on the weekly chart study, traders and investors can go for buying in Britannia above 3530 for the upside target of 3780–3840 levels with stop loss below 3320 on a closing basis.
Trade with the levels only.
Traders can trade safely in Nifty, Bank Nifty and given Stock recommendations with levels only. More will update during the market hour.
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