Nifty closed at 15,436 with a gain of 260 points on a weekly basis. On the weekly chart the index has formed a long bullish candle forming higher High-low compared to previous week and has closed above previous week’s high indicating positive bias. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart indicating positive bias. The chart pattern suggests that if Nifty crosses and sustains above 15500 level it would witness buying which would lead the index towards 15650-15800 levels. However if the index breaks below 15300 level it would witness profit booking which would take the index towards 15200-15100.
Nifty is trading above 20 and 50 day SMA’s which are important short term moving averages, indicating positive bias in the short term. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 15800-15300 with a positive bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.
Nifty derivative outlook
In May series Nifty witnessed a rollover of 77.28% compared to 66.28%, adding 2.35Lac shares with price gains of 2.97% and started June series with OI of 104.73Lac shares compared to 102.38Lac shares in May expiry. Nifty futures on Friday closed at 15463.85 on a positive note with price gains of 0.50% (compared to previous day) and 5.33% increase in open interest adding 5.26Lac shares indicating Long Build Up. The sentiment indicator PC Ratio is currently trading at 1.32 although well above the median line but in a comfortable zone indicating a positive bias in the market. In Nifty the high OI on the CALL side in the weekly expiry scheduled 03rd June is at 15,500(27.03L), 15,600(23.29L) & 16,000(40.62L), with 15,500 & 15,600 acting as a resistance wherein there has been writing of 12.61Lac shares & 11.43 Lac shares respectively. The high OI on the PUT side is at 15,300(25.64L) -15,000(23.64L) & 14,700(23.73L) strike, with 15,400 acting as a strong pivotal level as there has been of writing of 16.63Lac shares. So as per the options data the important range indicated is 15,400 to 15,600 and any sustained move above or below this range will indicate the direction of market trend.
Bank Nifty outlook
Bank Nifty started the week on a flat note and buying momentum for most part of the week led it to close on a positive note. Bank Nifty closed at 35141 with a gain of 535 points on a weekly basis.
On the weekly chart the index has formed a small Bullish candle forming higher High-low compared to previous week and has closed above previous week’s high indicating positive bias. The index is moving in a Higher Top and Higher Bottom formation on the daily chart indicating sustained up trend on long term charts. The chart pattern suggests that if Bank Nifty crosses and sustains above 35500 level it would witness buying which would lead the index towards 36500-36800 levels. However if index breaks below 34500 level it would witness selling which would take the index towards 34000-33000. Bank Nifty is trading above 20, 50 and 100 day SMA’s which is important short term moving average, indicating positive bias in the short term. Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 36800-34500 with a positive bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.
Bank Nifty derivative outlook
Bank Nifty witnessed a rollover of 80.76% compared to 64.60%, adding 3.74Lac shares with price gains of 4.09% and started June series with OI of 17.70Lac shares compared to 13.97Lac shares in May expiry. Bank Nifty futures on Friday closed at 35321.80 on a positive note with marginal price gains of 0.04% (compared to previous day) and 1.62% increase in open interest adding 0.28Lac shares indicating Long Build Up. In Bank Nifty the high OI on the CALL side in the weekly expiry scheduled 03rd June is at 35,500(9.37L), 36,000(9.11L) & 37,000(8.24L), with 36,000 acting as a strong resistance wherein there has been writing of 4.13Lac shares. The high OI on the PUT side is at 35, 000(8.92L), 34,500(7.52L) & 34,000(6.29L) strikes, with 35,000 & 34,500 acting as a strong support level as there has been of writing of 4.13Lac & 2.74Lac shares respectively.
The tentative range for the current week is likely to be between 34,000 to 36,000. India Vix is currently at 17.40 % and has been in downward trajectory after making a recent high of 21.32% suggesting confidence and stability in current market trend and further descend from these levels will further augment for more uptrend in market.
Sectors and stocks in focus this week
We expect Banking, Financial, IT, Pharma, FMCG, Oil & Gas, and Consumer Durable sectors to do well in the near term. One can focus on stocks like State Bank of India (SBI), Punjab National Bank (PNB), Cipla, Reliance Industries Ltd (RIL), Adani Ports and Special Economic Zone, Just Dial, Wipro, Piramal Enterprises Ltd (PEL), Minda Industries, Colgate-Palmolive (India), REC Ltd, for the near-term bullish trend.
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