In coming truncated week, Dalal Street may witness higher volatility due to a large number of large-cap’s earnings. Fed Policy and Budget Cautiousness. Technically below 14350, the index price may continue its sell-off else can test 14760 marks on the upside. Bank Nifty next move will mainly depend on upcoming banks’ earnings. Technically below 32000, it may continue its downward move to test 30800-30200.
Dalal Street Market Summary
On Friday, The market traded on a lower note in the midst of weak global cues, bears took the charge. Metal stocks were the worst hit in Friday’s blood bath, the metal index traded almost 3% lower, heavyweight Jindal Steel, Hindalco, JSW Steel dragged. Sail led the losses by 9.5%. Nifty Pharma underperforms by 1%, Biocon was the top underperformer down by nearly 10% after the company presented its financial performance which led the investors to book profit heavily in the company.
Bears took hold on the Realty Stocks, the sector shed almost 2% on the NSE. Banking stocks were in a bloodbath during Friday’s session dragging overall benchmarks. Nifty Bank with Private Bank lenders was the worst hit. PSU banks were also under pressure. Investors’ concerns arise due to non-performing assets (NPA) that are not classified during the loan moratorium period amid the Covid-19 pandemic.
The 30-share BSE Sensex was down 746.22 points, or -1.50%, to close at 48878.54. Nifty 50 ended down 218.50 points or -1.50% to close at 14371.90. Bank Nifty closed at 31179.70, closed with a loss of 1007.20 points. Indian Volatility Index surged 1.09 percent to close at 22.42. Market breadth ended in favor of bears. Around 1391 stocks on the NSE closed with a gain, while 541 stocks ended with a loss, and 306 shares are unchanged. Now, what to expect in the coming week.
Events that may add volatility in coming week, Need to be watched.
Q3 2021 earnings
25/01/2021- Can Fin, LT
27/01/2021- Axis Bank, Bank Of Baroda, Canara Bank, Hind Unilver, ICICI Prdenial Life insurance, Marico, United Sprit
28/01/2021- BEL, Cummins, Lupin, M&M Fin, Maruti, Pidilite, RBL Bank, Shriram trans Fin, Tata Chemical
29/01/2021- Cholamandlam, Cipla, Dabur, Dr. Reddy’s Ltd, Exide Ind, IOC, Lichsgfin,
Manapuram Finance, Sun Pharma, Tata Motors, TechM
30/01/2021- ICICI Bank, IDFC First Bank
Important Events
*26th January- Indian Holiday on account of Republic Day.
*28th January- Fed Policy, US
*FII and DII participation
*F&O Positions
*Corporate earnings
*Technical levels
Technical View on Nifty and Bank Nifty
Nifty
On a weekly scale, Nifty 50 price formed another DOJI formation which indicates the next move is indecisive on the Dalal Street. Index price ended marginally lower 0.43 percent on a weekly scale.
On a daily scale, the price ended in red formation on Friday in continuation of double top formation. Below 14600, the sentiment is bearish for the upcoming sessions. Price is likely to continue its downward move for the target of 14222-14050-13800. Contrary, fresh buying would be seen only close above 14766 marks.
Price action and the advance-decline ratio were in favor of bears. Nifty Implied Volatility index plunged for 6.61% to close at 22.42 marks. Cooling off in VIX gives favor to bulls. PCR shifted its support to 14300
Nifty Trend:
Support lays down at 14350; Closing below 14350 may extend its down move to 14000-13800. Above 14350 every dip is a buying opportunity for the target of 14760.
F&O Analysis
According to Open Interest Data, Maximum Call open interest stand at 15000 followed by 14600&14700 and Put at 14000 followed by 13500 & 14200 suggests us a broad trading range for the upcoming week. PCR stands at 14300 validates it as an immediate support level. Build up inputs & writing in call option do the bears favor.
Nifty futures strategy for the week
Support 14200, Resistance 14766.
Sell below 14200 for the target of 14000-13800.
Nifty Futures strategy for the day
Support 14350, Resistance 14520
Strategy – Buy above 14520 for the target of 14650 OR Sell below 14350 for the target of 14220.
Bank Nifty
The financial index Bank Nifty unable to test 33000 marks for the consecutive second week and formed a strong bearish candle on the daily chart. Bank nifty price slipped from 32842.30 levels and corrected for more the 1700 points in the last two trading sessions. Technically, the index looks weak for downside levels. Below 32000, the index is likely to continue its downward move for 30800-30200 levels. Any pullback for 31600-31800 would be a selling opportunity for the above-mentioned levels.
Bank Nifty Trend
Key support lays down at 31000 (Spot Level). Above 31000 (Spot Level) marks price give a pullback move for 31600-31800. Below 32000, every high is a selling opportunity for the target of 30800-30200.
Bank Nifty Futures strategy for the week
Support 31000, Resistance 32000
Strategy – Buy around 31000 with a stop loss of 30800 for the target of 31600-31800 OR Sell around 31800 with the stop loss of 32100 for the target of 31000-30200.
Bank Nifty Futures strategy for the day
Support at 31000 and Resistance at 32000.
Strategy – Buy around 31000 with a stop loss of 30800 for the target of 31600-31800 OR Sell around 31800 with a stop loss of 32100 for the target of 31000-30200.
Top Stock Recommendation for Monday (25th Jan 2020)
Kaveri Seed Company Ltd. (Cash)
After a long correction on the daily chart, the stock is trying to take reversal on the daily chart. We will expect a sharp upside move in this stock in the coming days. Traders can do buying above 560 for the upside target of 600 and then to 640 levels in days to come.
Support and stop loss remains at 520 levels on a closing basis.
ACC (Futures)
ACC, the stock has rebounded from major support levels. Traders are advised to do buy above 1707 for the upside target of 1740 and then to 1750 in the days to come.
Support and stop-loss remain at 1670.
Traders can trade safely in Nifty, Bank Nifty and given stock recommendations with levels only. Dalal Street more news and updates will be send during market hours. To get real time updates on your WhatsApp, click on the banner given below.
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