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MARKET OUTLOOK

* During the ongoing result season, till date, the results and management commentary suggests domestic demand is sustaining, though bottom of the pyramid consumer is still struggling. International demand is already witnessing slowdown. IT sector has disappointed, banks are expecting NIM to decline and loan growth to slowdown, Auto companies have shown positive results and FMCG results have been mixed bag. With these results we may see some downward revision in NIFTY EPS.

* The initial estimate for monsoon is not encouraging and if we see lower monsoon with uneven distribution, then the impact on overall growth of economy will be larger. In that case two engines of growth will get disturbed i.e. first exports and second rural demand. We will get more clarity on this as we move forward.

* Central banks across the world are near the peak of rising rate cycle. RBI has already paused the interest rate increase. RBI has indicated that inflation is in a declining trend, although it is still above the comfort zone. As such higher interest rates are likely to sustain for some time and impact growth in the economy.

* Overall environment is subdued, growth will be lower, but valuations are reasonable. As such market is likely to remain in a range. We expect Nifty to remain in a range of 17500-18200 in May series.

* As Nifty is holding up we are seeing good traction in mid cap and small cap stocks which we feel is likely to continue in May series.

NIFTY TECHNICAL OUTLOOK

* The Nifty witnessed a pullback rally in the month of April. The rally in April was taken over by the Bulls. The sentiment on the D-Street was positive.

* The Nifty is trading above 200-DMA, suggesting a positive view for the near term. Any move above the 18100 level (61.8% Fibonacci Retracement Resistance Level) on closing basis may extend the pull back rally towards 18200-18340.

* Going ahead, the Nifty has support at the 17860 mark provided by 100- DMA. If the Nifty fails to hold the support of the 17700 mark (200 DMA), then the profit booking is likely to witness towards 17550- 17350.

* We believe that after a pullback rally, we may witness profit booking at resistance levels as the Nifty has witnessed a stiff rally from 16,940 towards 18,000. So, profit-booking at higher levels can’t be denied. Going ahead, a breather of a few days from here on will, in turn, make the market healthy.

BANKNIFTY :-The Bank Nifty faces an immediate resistance around 43500 levels on the upside and on a decisive close above expect a rise towards 43740- 44000. There is an immediate support at 43000- 42670 levels. We advise investors to stay light on long positions as they may get an opportunity to build long positions at support levels

DERIVATIVES OUTLOOK

* The Nifty Apr rollover of 64.11% is lower than its Three months average of 75.41% and its six months average of 77.23%.

* The Banknifty Apr rollover of 81.67% is lower than its Three months average of 87.02% and its six months average of 85.38%.

* The market wide rollover of 92.11% is lower than its three months average of 92.95% and its six months average of 92.42%.

* Nifty is opening the series with lower than average open interest which means that the index is likely to witness continuation of previous month bullish trend.

* The Index options OI for May series is indicating that index is likely to remain positive for the first part of the series.

* The PCR and VIX are at indicating positive bias for the current expiry.

* View: The index is likely to remain positive in the first half of May series with important supports placed at 17800-17500 levels and resistance at 12000-18500 levels

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