Weekly Trend of Nifty and Bank Nifty
Despite the tremendous increase in coronavirus cases in India, Indian bourses were on the rise. So what is the reason behind the sudden buoyancy in the headline index? Is it a Pullback rally or Are we entering the bull trend again? It is a question of concern.
No valuation support, Just behind five countries in coronavirus cases worldwide, whole country business disrupt from more than two months, 200 lakh crore economy is expecting to shrink in 2020-2021. Falling tax revenue and increasing additional expenditure. Most severe health threat, disappointing quarterly earnings, and likely to continue in the future. Despite all these facts, the headline Index has shown a buoyancy on Dalal-street because of injunctive liquidity and easing in lockdown terms.
Indian bourses rallied more than 15% in the last two weeks and ended at three months high. The week witnessed on chasing the liquidity which helps the market to close at the strong note for the consecutive second week.
FII created a buying approx 13000 crores in the first week of June. Now the question of concern is that despite a healthy gain in Indian indices, on Friday FIIs go with marginal buying of just 97 crores. It indicates we need to be cautious at higher levels. Following the global scenario, this trend is likely to continue in the upcoming week and we are going to witness a green opening of the week.
Weekly Trend of Nifty 50
Nifty 50 price has been trading above all major averages, leaves 200 DMA only. The 200 DMA is laid down at 10580 which may be a crucial resistance for the market in the immediate term.
The second consecutive week nifty formed a bullish candle. The index defended the psychologically important 10,000-mark and formed a three small candle on the daily chart. On the weekly chart, the price formed a strong green candle with a 6% addition in value.
Despite a bullish close on Friday nifty price followed a very narrow range and its last two days candles were indecisive too. We need a strong close to be decisive for the next trend
Market breadth remained positive throughout the week. We are looking for a strong candle in either direction to be sticky on the trend.
The nifty immediate target is 10270-10320, Closing above 10320 will lead it for the next target of 10550-10580 where 200 DMA laid down, Else it may test its downside support of 10000-9940.
Fresh selling would be seen only closing below 10000.
Any closed below 10000 will give a bear bias and below 9940 it will get accentuated for the next target of 9780-9720.
F&O Analysis
According to Open Interest Data, Maximum Call open interest stand at 10500 followed by 10300, and Put at 10000 followed by 9800 suggests a narrow trading range for the index. PCR stands at 10000 validate it as a strong support level.
Weekly Trend of Nifty – Have a look at the chart
Nifty (future) strategy for the week
Support at 10000, Resistance is at 10320.
Either side of the breakout will give 150-250 points in the respective direction.
Nifty (future) strategy for the day
Support at 10000, Resistance at 10170.
Trading Above 10170 may extend its up move for the target of 10250-10320. Below 10000 it will slide it further for 9940-9850.
Weekly Trend of Nifty Bank
On the other hand, Financial benchmark Bank Nifty added approx 9% of its value and now facing a resistance above 21500-21800.
Following global strong sentiments, If Index Breached 21800 level we may see 1000-1500 points up move.
On the Flipside holding above 20200 may drop it for the 19300-18700 mark.
Bank Nifty (future) strategy for the week
Weekly trend of Nifty Bank – Support 20200, Resistance 21800.
Either side of the breakout will give 1000-1500 points in the respective direction
Bank Nifty (future) strategy for the day
Support at 20500 and Resistance at 21200
Buy above 21200 for the target of 21500-21800, else may test 20500 on the downside.
Or
Sell below 20500 for the target of 20300-20000.
Sector Update
Nifty Realty is ready to build new highs
The government has decided to unlock different sectors in phases and the Realty sector will play an important role to revive the Indian economy. Most of the pending projects will start soon and take this sector on the track.
On the technical front, Nifty Realty formed a bullish candle on the weekly as well as the daily chart. We will expect it to build new highs in upcoming sessions. The momentum indicator also supports our positive view in this sector. Buy on dips is a fruitful strategy in this sector. We will expect an upside move till 220 and then to 225 levels in days to come. Support around 180, break and close below 180 will negate our positive view in this sector.
Stocks to perform this week are:
Mahlife – Stock formed a bullish pattern on the daily chart. Hurdle around 211, break and sustain above 211 will take it to 228 and then to 240 levels in days to come. Support and stop loss below 195 on a closing basis.
Prestige – Stock looks bullish on the charts. hurdle around 174, break above 174 will touch 190 and then to 200 levels in days to come. Support and stop loss below 160 on a closing basis.
Top Stock Recommendations (8th June 2020)
VOLTAS (Future)
Catch this counter above 582 as stock is trading in a positive trend on the chart.
Traders can buy above 582 with a stop loss below 560 levels on a closing basis for an upside target of 610—620 levels in days to come.
UJJIVAN (Future)
Grab Ujjivan around 182, after a small retracement stock looks bullish on the chart.
Traders can buy this counter around 182 with a stop loss below 176 levels on a closing basis for an upside movement till 195—200 levels in the coming days.
Mahlife (Cash)
Catch it above 211 as stock formed a bullish pattern on the daily chart.
Hurdle around 211, break and sustain above 211 will take it to 228 and then to 240 levels in days to come.
Support and stop loss below 195 on a closing basis.
TATAELXSI (Cash)
Tata Elexi has resistance around 860. Break and close above 860 will see sharp upside till 920 and then to 950 levels in days to come.
Traders are advised to buy the stock above 860. Support and stop loss will be below 810 on a closing basis.
Traders can trade safely with levels only. More news will update during market hours throughout the week on our Telegram Channel and WhatsApp broadcast.
[…] index gave a strong opening and failed to hold the gain and retraced to fill the morning gap. The index is likely to be consolidating in a range of 10000-10320 in the upcoming session. Technically, […]