RAHUL SHARMA
DIRECTOR & HEAD- TECHNICAL DERIVATIVES RESEARCH,
SERVICES
Where is the Nifty headed?
With the RBI policy and US inflation data scheduled to be released this week, it should be a tricky week for traders. Friday’s session saw unwinding of longs in Nifty futures while Bank Nifty futures saw addition of short positions. Nifty PCR OI (put call ratio open interest) corrected back to 0.97 on aggressive call writing. If we are able to cross 16,800, we can expect targets of 17,000 to 17,200 on the upside. However, if we breach 16,500, we may see Nifty testing 16,300 on the downside.
What should investors do?
Strong GDP numbers along with inflation would mean RBI would hike rates without much hesitation. This can keep the market choppy for some more time. Traders can look to buy Nifty futures on dips around 16,300 for a target of 16,800 with stoploss at 16,100. Bank Nifty could remain under pressure and as long as it doesn’t cross 35,800 we may see weakness continue. We are bullish on
for a target of Rs 2,325 with a stoploss at Rs 2,125.
ROHIT SRIVASTAVA
FOUNDER, INDIACHARTS.COM
Where is the Nifty headed?
Nifty retraced 61.8% of the fall for the Month of May near 16,750, a critical resistance, and could not stay above it. From here, Nifty has the potential to start another leg down that may retest the 16,000 mark and go below it. Bank Nifty closed down for the week. It was the leader in the bounce and may be leading the decline as well. Accordingly, Bank Nifty may have topped out at 36,083 and could be heading back to 34,000.
What should investors do?
With RBI policy, expect weakness in interest rate sensitive sectors like banking, automobiles and real estate. The strategy therefore remains bearish where traders comfortable playing the short side would benefit more from the coming decline.
CHANDAN
DERIVATIVE ANALYST,
Where is the Nifty headed?
Nifty started last week by surpassing a key hurdle of 16,400 and headed towards 16,800. However, on Friday it failed to hold at higher levels and settled the week with gains of around 1.5%. It formed a small bodied bullish candle on weekly chart while a bearish candle on daily scale which suggest declines could be bought. But follow up buying is missing. It has recently bottomed out on weekly scale with support at 15,735 and has been making higher lows from last three weeks which indicate base of the market is moving higher. India VIX has been falling for last three weeks and corrected from the high of 25.99 to 18. But overall higher VIX indicates that the roller coaster ride could continue. The Indian market is reacting more to global indices and any change in price sentiment in DJIA, S&P500 and Nasdaq could give trigger to the Indian equity market. DJIA has completed a Harmonic Bullish AB=CD pattern along with positive divergence on mechanical indicators, hinting at some bounceback. Now, Nifty has to hold above 16,400 zone for an up-move towards 16,800 and 17,000 zones whereas supports are placed at 16,250 and 16,161 zones.
What should investors do?
Investors can use small declines to add good quality stocks from private banking, financial, consumption and auto sectors, while traders are suggested to play any bounce-back move with right position sizing to deal with this volatile market. One can go with Bull Call spread by buying 16,600 Call and selling 16,800 Call to play the bounce towards 16,800-17,000 zones. Stock specific, positive on
, , , Birla Soft, etc.
