Nifty managed to break above the psychological level of 15,150 and formed a strong bullish candle on the daily and weekly charts. Analysts said Nifty may witness further bounce if it manages to hold above this level. Can the index manage to take out the 15,300 level this week? Or will we see some more consolidation?
Here’s how analysts read the market pulse:-
Mazhar Mohammad of Chartviewindia.in, said, Nifty needs to see some follow-through buying in the next trading session without violating the low of 14,985. “As long as Nifty sustains above the said low, one can remain positive and expect it to retest its lifetime high at 15,431 level. However, the 15,336 level may pose some resistance. For the time being, any dip can be an opportunity to create fresh long positions,” he said.
Shrikant Chouhan, Executive VP, Equity Technical Research, Kotak Securities, said, Nifty has the potential to breach 15,500 level as it managed to close above the 15,000-mark on both daily and weekly basis. “The falling Covid cases and good earnings season could be the main reason for further up move. We need to see whether FPI flows turn net positive for this up move to play out,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
US shares
US stocks ended mostly lower on Friday, weighed down by technology and consumer discretionary shares, while the dollar edged higher after stronger-than-expected US manufacturing data. US Treasury yields slipped as the market mostly shrugged off the data. The S&P tech index closed down 0.5%, while the consumer discretionary index fell 0.6%. The Dow Jones Industrial Average rose 123.69 points, or 0.36%, to 34,207.84, the S&P 500 lost 3.26 points, or 0.08%, to 4,155.86 and the Nasdaq Composite dropped 64.75 points, or 0.48%, to 13,470.99.
European shares
European markets closed higher on Friday amid optimism about economic recovery after positive euro zone PMI data and U.K. retail sales numbers. According to flash survey data from IHS Markit, the euro area private sector activity grew the most in more than three years in May as economies continued to open up from virus restrictions. The composite output index rose to 56.9 from 53.8 in the previous month. The score was expected to climb moderately to 55.1. The pan European Stoxx 600 climbed 0.57%. Germany’s DAX gained 0.44%, France’s CAC 40 surged up 0.68% and the U.K.’s FTSE 100 edged down 0.02%. Switzerland’s SMI ended 0.66% up. Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Ireland, Netherlands, Norway, Poland, Russia and Spain ended higher.
Tech View: Nifty breaks crucial resistance at 15,150
Nifty50 broke above its crucial resistance at 15,150 level on Friday and formed a solid bullish candle on the daily chart, negating the formation of lower highs and lows. On the weekly scale, the index formed a Bullish Marabozu pattern. The index has set its sights on the 15,300 level, breaching which it can make fresh highs, analysts said. “Nifty has seen a breakout from its Falling Trendline, as well as the upper band of Bollinger formation, which signals strength. Moreover, the index has formed a Bullish Marabozu Candle on the weekly chart, which signals further upsides in the coming sessions. The Stochastic oscillator and MACD indicator also suggested a positive crossover on the daily time frame chart, which adds further strength to the counter,” said Sumeet Bagadia of Choice Broking.
Check out the candlestick formations in the latest trading sessions
F&O: India VIX eases 3%
India VIX fell 2.90% from 19.65 to 19.08 level. India VIX needs to hold below 20 level to extend the bullish market momentum towards a new lifetime high. On the options front, maximum Put Open Interest stood at 14,000 level followed by 14,500, while maximum Call OI was seen at 15,500 followed by 16,000 levels. Call writing was seen at strike prices 15,700 and 15,600 and Put writing at 15,000 and 15,100. Options data suggested a broader trading range between 14,800 and 15,400 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Bandhan Bank,
, Religare Enterprises, Infosys, Kotak Mahindra Bank, Natco Pharma, Alembic, HDFC Life Insurance, Banco Products, Butterfly Gandhima, Poly Medicure, Sudarshan Chemicals, Salasar Techno Engineering, InfoBeans Tech, Lumax Auto Technology, Ind-Swift Laboratories, Kellton Tech Solutions, Ashiana Housing, Seamec, KSB, Johnson Controls-Hit, Brooks Laboratories, Whirlpool of India, Future Enterprises, Sundaram Finance, Shree Cement, Seya Industries, Steel City Securities, Schaeffler India, Ratnamani Metals, Universus Photo Image and Sundaram Clayton.
The MACD is known for signalling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of GAIL (India), Tata Steel BSL, Usha Martin, DCW, Dwarikesh Sugar, Sun Pharma, Rana Sugars, Marico, Nava Bharat Ventures, KM Sugar Mills, Ugar Sugar Works, A2Z Infra Engineer, Mangalam Drugs, CCL Products India, GE T&D India, Uttam Sugar Mills, TD Power Systems, Genus Power Infrastructure, Kirloskar Ferrous, Rossell India, Magadh Sugar & Energy, Vaswani Industries, Gallantt Metal, GlaxoSmithKline Pharma, Gallantt Ispat, Onward Technology, Beardsell, Ausom Enterprises, Arihant Superstructure, Alicon Castalloy, Gandhi Specialty, TIL, Bharat Rasayan and Ganges Securities. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Friday’s most active stocks in value terms
SBI (Rs 7,587.30 crore), Tata Steel (Rs 1,572.78 crore), ICICI Bank (Rs 1,525.47 crore), HDFC Bank (Rs 1,428.70 crore), IndusInd Bank (Rs 1,269.75 crore), Tata Motors (Rs 1,262.46 crore), Axis Bank (Rs 1,145.47 crore), Adani Enterprises (Rs 1,093.80 crore), Bank of Baroda (Rs 1,084.22 crore) and Bajaj Finance (Rs 1,047.84 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Friday’s most active stocks in volume terms
SBI (Shares traded: 19.28 crore), PNB (Shares traded: 17.83 crore), Bank of Baroda (Shares traded: 13.69 crore), Vodafone Idea (Shares traded: 13.40 crore), YES Bank (Shares traded: 11.23 crore), South Indian Bank (Shares traded: 10.82 crore), HFCL (Shares traded: 10.75 crore), BHEL (Shares traded: 6.37 crore), Reliance Power (Shares traded: 6.27 crore) and IDFC First Bank (Shares traded: 5.24 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Adani Total Gas, HFCL, Motilal Oswal,
, and Natco Pharma witnessed strong buying interest from market participants as they scaled their fresh 52-week highs signalling bullish sentiment.
Stocks seeing selling pressure
DSJ Communications, Isgec Heavy Engineering, Keerti Knowledge and Skills, and Moksh Ornaments witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of bulls. As many as 324 stocks on the BSE500 index settled the day in the green, while 173 settled the day in the red.
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