Nifty Weekly Outlook 02 May 2020

Equity benchmarks concluded truncated monthly expiry week on a cheerful note underpinned by strong global cues. The Nifty ended the week at 9860, up 706 points or 7.7%. Nifty midcap performed in tandem with benchmarks as it rose over 6%, indicating broader market participation. Sectorally, financials, metal and IT relatively outperformed while pharma stocks took breather after recent run up.

The Nifty has seen sharp up move of ~1000 points over past seven sessions, leading daily stochastic to approach overbought territory with reading of 94, indicating possibility of temporary breather cannot be ruled out. However, we believe any temporary breather toward 9400 should not be construed as negative instead it should be capitalised as an incremental buying opportunity. In the process we expect catch up activity would be seen in midcap and small cap stocks.


Structurally, the formation of higher peak and trough on the weekly chart for fourth consecutive week, underpinned by broadening of sectoral participation (as cycliclas continued to outperform), signifies broad based participation in turn suggesting rejuvenation of market breadth that augurs well for durability of ongoing up move, which makes us confident to upgrade the support base at 9400.

Erstwhile resistance of 9400 would now change its role and act as a strong support as per change of polarity concept.
Hence any dip from hereon should be capitalized as incremental buying opportunity.


Bank Nifty

Bank Nifty ended the April month on an optimistic note and at the highest point for the month. Decline in the US Dollar index from 100.70 levels provided cushion to INR which appreciated sharply from 76.7 levels. Most of the private banks supported the up-move however, short covering was seen in PSU leader like SBI due to strengthening of INR. Rollover was above average where most of the private banks saw long rollovers for the May series. As the Bank Nifty moved above 21000 levels, closure was seen in ATM strike Call and the OI moved to 22000 strike. Huge OI blocks were seen in 22500 strike Call as well which can act as a supply zone. However, Put writers continued to move higher as the index rose and for the May series, OI build-up is seen at 20500 Put strike which should provide cushion.



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Nifty weekly outlook 25 April 2020

Nifty has broadly remained above crucial 8900 levels during the week which shows some resilience exhibited at higher levels. The currency also appreciated a bit towards the close of the week which supported the pullback from 8900 levels. FIIs selling has reduced significantly which has led to this consolidation. Buying is seen in sectors like FMCG and Pharma. The volatility cooled-off further to sub 40 levels which soothed the market sentiments. The start of result season has also led to more stock specific moves within a broader range of Nifty.

Technical Outlook
On the weekly chart, Nifty50 formed a Hanging Man pattern, potentially a bearish candlestick pattern. The index continued to consolidate within the prior week’s range while facing strong resistance at 9,350 level for most part of the week. The recent rally from the low of 7,500 has unfolded in the form of a Rising Wedge pattern, which was clearly evident on the daily timeframe chart, which is a bearish indication. A break below the 9,100 level will confirm the Rising Wedge breakdown and the index may retest the 8,800 level on the downside. Traders can initiate shorts for a break below 9,100 in Nifty50.

Bank Nifty -

Last week Nifty has managed to move and sustain above 9000 levels but under-performance was clearly visible in Bank Nifty which again slipped below 20000 levels. However, Bank Nifty traded in a broader range amidst high volatility. Sharp appreciation was seen in INR from its sizeable Call base of 77 with lower Crude Oil prices triggering positive sentiments for domestic equities. IV's have further contracted from 46 levels and it slipped below 40 levels which is a positive sign going forward. Absence of any major buying by the FII's in the cash segment are likely to keep the index move in check. Call OI blocks are seen in 20000, 20500 and 21000 strikes whereas Put OI base is seen at 18500 strike which remains the key support area for the upsides to continue. Rollover activities are likely to pick up which will trigger some intraday volatility going ahead.



The material on this site is provided for information purpose only. This associated sites do not accept liability for your use of the materials provided.