By Rajesh Palviya
Nifty started the week with an upward gap and buying momentum for the most part of the week led it to close on a strong note. Nifty closed at 18256 with a gain of 443 points on a weekly basis. On the weekly chart, the index has formed a long bullish candle forming higher High-low compared to the previous week and has closed above the previous week’s high indicating positive bias. The chart pattern suggests that if Nifty crosses and sustains above 18300 levels it would witness buying which would lead the index towards 18400-18600 levels. However, if the index breaks below 18100 level it would witness selling which would take the index towards 18000-17800. For the week, we expect Nifty to trade in the range of 18500-17800 with a positive bias. The daily and weekly strength indicator RSI is in bullish mode and sustaining above 50 mark which supports bullish sentiments ahead
Bank Nifty
Bank Nifty started the week on a positive note and remained positive in the initial period however profit booking at higher levels erased most of the earlier losses to end on a flat note. Bank Nifty closed at 38370 with a gain of 631 points on a weekly basis. On the weekly chart, the index has formed a small Bullish candle with a long upper shadow indicating profit booking at higher levels. The chart pattern suggests that if Bank Nifty crosses and sustains above 38900 levels it would witness buying which would lead the index towards 39300-39700 levels. However, if the index breaks below the 37900 level it would witness selling which would take the index towards 37400-37000 levels. For the week, we expect Bank Nifty to trade in the range of 39600-37600 with a positive bias. The daily and weekly strength indicator RSI is in bullish mode and sustaining above 50 mark which supports bullish sentiments ahead.
Derivative Outlook :
Bank Nifty Put options OI distribution shows that 38000 has highest OI concentration followed by 38500 & 38200 which may act as support for current expiry. BankNifty Call strike 38500 followed by 38000 witnessed significant OI concentration and may act as resistance for current expiry.
Sectors and stocks for coming weeks:
We expect IT, Cement, Sugar, Fertilisers, Chemicals and Real Estate may do well in the near term. One can focus on stocks like Infosy, ACC, Balrampur chini, GNFC, Chambal Fertiliser, Tatachem, Deepak Nitrite, Brigade, DLF.
(Rajesh Palviya is the Vice President – Research ( Head Technical & Derivatives) at Axis Securities Limited. Views expressed are the author’s own.)