Published on 7/05/2021 1:10:41 PM
Markets pare some gains in noon session
The local equity markets have pared some of their gains but are still trading in positive terrain in noon session. Both Sensex and Nifty were trading above the crucial 49,100 and 14,750 levels, respectively. Some support came as Finance Ministry released the second monthly installment of revenue deficit grant of Rs 9,871 crore to 17 states. With the release of the second installment, a total amount of Rs 19,742 crore has been released in the first two months of the current financial year as Post Devolution Revenue Deficit Grant to the states. However, markets trimmed some of their gains as Fitch Solutions states that India is likely to breach its fiscal deficit target in the financial year to March 2022 mainly due to revenue shortfall. The government is targeting a deficit between revenue it earns and what it spends at 6.8 per cent of the gross domestic product (GDP) in FY22 (April 2021 to March 2022). Meanwhile, foreign portfolio investors (FPIs) bought shares worth Rs 1,222.58 crore, while domestic institutional investors (DIIs)were net sellers to the tune of Rs 632.51 crore in the Indian equity market on 6 May, provisional data showed.
On the global front, Asian markets were trading mixed as traders keenly await a key US jobs report that is expected to reaffirm the recovery in the world's top economy is blasting ahead. Back home, in scrip specific developments, Blue Star surged on reporting 7-fold jump in Q4 consolidated net profit and Muthoot Finance gained on collaborating with fintech NIRA.
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Published on 7/05/2021 11:12:20 AM
Nifty Bank: 32827
Technical Outlook
* The daily price action formed a high wave candle with a higher high -low signalling consolidation with positive bias . The index is seen forming higher base above the 61 . 8 % retracement of previous two week up move (30405 -34287 ) . A follow through up move above Tuesday’s high (33012 ) will signal a pause in the current profit booking trend
* Going ahead, after a up move of more than 3800 points in just seven sessions, the index is seen consolidating in the broad range of 31500 -34000 . Therefore we believe dips should be capitalised as buying opportunity, as we expect index to head towards 34900 levels in the coming month being the 61 . 8 % retracement of the entire decline (37708 -30405 ) .
* Key point to highlight is that over the past six sessions the index has retraced 61 . 8 % of preceding seven session’s up move (30405 - 34287 ) . The slower pace of retracement indicates a higher base formation
* The slower pace of retracement after the recent up move of 3880 points, which is the larger in magnitude compared to late February up move of 2256 points highlights robust price structure
* The index maintained the rhythm of not correcting more than 20 % as witnessed since March 2020 . In the current scenario it rebounded after correcting 19 % from the all -time high (37708 ) . Hence it provides favourable risk -reward setup for the next leg of up move
* The index has immediate support at 32000 -31500 levels being the confluence of the previous week low and the 61 . 8 % retracement of the current up move (30405 -34287 ) . While the major support is placed in the range of 30500 -30000 levels
* In the coming session, the index is likely to witness gap up opening tracking firm global cues . We expect the index to trade with a positive bias while sustaining above the psychological mark of 33000 . Hence after a positive opening use dips towards 33045 - 33105 for creating long position for the target of 33240 , maintain a stoploss of 32990
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Published on 7/05/2021 11:12:06 AM
NSE (Nifty): 14725
Technical Outlook
* The index witnessed follow through strength to Wednesday’s inside bar and formed a bull candle carrying higher high-low, indicating conclusion of secondary correction
* The index has decisively closed above the previous session's high (14638) after four session’s corrective move, indicating rejuvenation of upward momentum that makes us believe the Nifty would resolve higher and head towards upper band of consolidation at 14900 in coming sessions. Eventually, we expect the index to challenge 14900 and gradually retest lifetime highs of 15400 in May-21. Hence, any dip from here on should be capitalised on as an incremental buying opportunity amid progression of Q4FY21 result season
* Key point to highlight is that, over past five sessions the index has retraced 61.8% of preceding five session’s ~900 points up move, which is larger in magnitude compared to the early March rally of 868 points. The shallow retracement highlights a robust price structure that augurs well for next leg of up move
* The Nifty midcap index is on the cusp of resolving out of past two month’s consolidation, indicating rejuvenation of upward momentum. Meanwhile, small cap index is sustaining above the past two month’s consolidation breakout, highlighting strength that augurs well for acceleration of relative outperformance
* Structurally, we do not expect the index to breach the key support threshold of 14200 that has been held despite elevated volatility owing to concern over second Covid-19 wave. Hence, dips should be capitalised on as buying opportunity as level of 14200 is confluence of: a) Lower band of falling channel at 14200 b) 100 days EMA at 14255 c)April-21 low placed at 14151
* In the coming session, index is likely to open with a positive bias tracking buoyant global cues. We expect it to trade with a positive bias while maintaining higher high-low formation. Hence, use intraday dip towards 14795-14825 to create long for target of 14912
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Published on 7/05/2021 11:11:17 AM
Technical Outlook
Equity benchmarks concluded Weekly derivative expiry session on a positive note amid firm global cues. Nifty concluded Thursday’s sessions at 14725, up 107 points or 0.7%. In the coming session, index is likely to open with a positive bias tracking buoyant global cue. We expect index to trade with a positive bias while maintaining higher high-low formation. Hence, use intraday dip towards 14795-14825 to create long for target of 14912.The index has decisively closed above previous session's high (14638) after four session’s corrective move, indicating rejuvenation of uptrend that makes us believe, Nifty would resolve higher towards upper band of consolidation placed at 14900 in coming sessions. Eventually, we expect index to challenge 14900 mark and retest life highs of 15400 in coming months. Hence, any dip from here on should be capitalised on as an incremental buying opportunity
The Nifty midcap index is at the cusp of resolving out of past two months consolidation, highlighting strength which augurs well for acceleration of relative outperformance.
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Published on 7/05/2021 10:29:59 AM
Nifty Outlook
Markets gained over half a percent amid volatility and settled around the day’s high as well. After the flat start, the benchmark hovered in a range in the first half however buying in the select index majors turned the bias in the latter half. Metal, IT and auto were among the top gainers on the sectoral front.
Markets are consistently rewarding traders who are focusing more on sector and stock selection during the prevailing consolidation phase. And, we expect this trend to continue, at least in the near future. A decisive break above 33,100 in the banking index may result in further rebound else profit-taking may resume. In absence of any major events, COVID-related updates, earnings and global cues would remain on the participants’ radar.
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Published on 7/05/2021 10:28:46 AM
Banknifty
Banknifty opened with an upward gap and witnessed selling for first part of the session. However last hour pullback action pulled index higher and recovered some of the earlier losses.. Banknifty closed at 32828 with a gain of 44 points
On the daily chart the index has formed a Bearish candle with a lower shadow indicating buying at lower levels. The index continues to move in a Higher Top and Higher Bottom formation on the hourly chart indicating pos itive bias. The chart pattern suggests that if Banknifty crosses and sustains above 33300 level it would witness buying which would lead the index towards 34000-34500 levels. Important Supports for the day is around 32300 However if index sustains belwo 32300 then it may witness profit booking which would take the index towards 31600- 31200 levels.. Banknifty is trading above its 20 day SMA which indicates positive bias in the short term. Banknifty continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy
The daily strength indicator RSI has turned positive from the oversold territory and is above its reference line indicating sustained uptrend.
The trend deciding level for the day is 32785. If BANK NIFTY trades above this level then we may witness a further rally up to 33000-33175-33395 levels. However, if BANK NIFTY trades below 32785 levels then we may see some profit booking initiating in the market, which may correct up to 32610-32390-32215 levels
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Published on 7/05/2021 10:28:27 AM
Nifty
Nifty opened with an upward gap and remained in positive terrain throughout the day. Nifty closed at 14725 with a gain of 107 points.
On the daily chart the index has formed a Bullish candle with a lower shadow indicating buying at lower levels. The index continues to move in a Higher Top and Higher Bottom formation on the hourly chart indicating positive bias. The chart pattern suggests that if Nifty crosses and sustains above 14800 level it would witness buying which would lead the index towards 14900-15000 levels. However if index breaks below 14600 level it would witness selling which would take the index towards 14400-14250. Nifty is trading above its 20 day SMA which indicates positive bias in the short term. Nifty continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy.
The daily strength indicator RSI has turned positive from the oversold territory and is above its reference line indicating sustained uptrend.
The trend deciding level for the day is 14695. If NIFTY trades above this level then we may witness a further rally up to 14775-14825-14910 levels. However, if NIFTY trades below 14695 levels then we may see some profit booking initiating in the market, which may correct up to 14645-14560-14510 levels
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Published on 7/05/2021 10:27:30 AM
Technical outlook
Nifty 4hr chart has formed "Descending broadening wedge" pattern. The last few sessions ended up sideways mode along with some corrections inside the channel. The market is expected to continue on bullish momentum based on current price action, once the same break above the current key resistance holding near 14800. The upside rally could be testing all the way up to 14950-15050 levels in the upcoming sessions. Alternatively, if the market struggles to break the resistance, then it might retest the same and revise the trend to bearish/sideways mode once again. Key support holds near 14500. A slide to 14400 is also a possibility if the price makes or break below the current support level.
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Published on 7/05/2021 10:27:17 AM
NIFTY MORNING OUTLOOK
Pre-Market Friday! Asian market positive trading, Nifty50 on the SGX were trading higher at 14867.50 +87.05 points on indicating gap up opening for the NSE.
At the close in NSE, the Nifty 50 added 0.73%, while the BSE Sensex 30 index climbed 0.56%.
The biggest gainers of the session on the Nifty 50 were Hindalco Industries Ltd., which rose 5.13% or 18.85 points to trade at 385.95 at the close. Hero MotoCorp Ltd added 4.49% or 125.10 points to end at 2913.30 and Wipro Ltd was up 4.42% or 21.70 points to 512.30 in late trade.
Biggest losers included Power Grid Corporation of India Ltd, which lost 1.28% or 2.80 points to trade at 215.40 in late trade. UPL Ltd declined 1.20% or 7.70 points to end at 633.00 and Sun Pharmaceutical Industries Ltd. shed 0.83% or 5.70 points to 677.70.
The breadth, indicating the overall health of the market, 1570 rose and 1318 declined, while 117 ended unchanged on the India National Stock Exchange.
Rupee desk: The USD/INR was down 0.08% to 73.742.
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Published on 7/05/2021 10:26:19 AM
HIGHLIGHTS
Nifty futures closed at 14769.95 on a positive note with 3.84% increase in open interest indicating Long Build Up. Nifty Futures closed at a premium of 45 points compared to previous day premium of 61 points.
Bank Nifty futures closed at 32953.75 on a negative note with -6.90% decrease in open interest indicating Long Unwinding. Bank Nifty Futures closed at a premium of 126 points compared to previous day premium of 189 points.
FII's were seller in Index Futures to the tune of -251 and were buyer in Index Options to the tune of 1492 crores, Buyers in the Stock Futures to the tune of 19 crores. FII's were Net buyers in derivative segment to the tune of 1250 crores. India VIX index is at 22.03 v/s 21.96.Nifty ATM call option IV is currently 20.82 whereas Nifty ATM put option IV is quoting at 22.41
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