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Technical View

Sensex

Trend – The index has seen signs of profit booking in the month of April after making new all-time highs of 52516 and finding support near the uptrend support line. During the end of the month, more than half of the earlier losses were recovered.

Pattern – The index has formed a bearish candle with a long lower shadow indicating buying at lower levels. Any pullback (if any) should be used as a buying opportunity. Major support is at 47500 going forward.

Momentum – On the weekly chart, the RSI has eased off the overbought territory which says that the momentum is sideways as of now. Good bullish momentum build-up was seen in sectors like Metals and Pharma.

Direction – The index is expected to trade in positive territory until it breaks 45500 on the downside

Volatility – The weekly ATR has reached 1630 points which means that Sensex currently has a range of 1630 points for a 1 For private circulation only. Volatility – The weekly ATR has reached 1630 points which means that Sensex currently has a range of 1630 points for a given week. Although on the daily timeframe, it has remained flat throughout the month with few ups and downs indicating the trend in still intact. INDIAVIX (23.02) has dropped around 11.54% which means volatility had remained same.

Market breadth – Sensex has been underperforming the BSE Midcap and BSE Smallcap index on the monthly timeframe indicating that the overall market breadth is mixed. 411 stocks of BSE 500 index are above the 200-day SMA indicating the larger trend has been stable. The breadth has declined as compared to last month where 426 stocks were above the 200-day MA.

Our take – Sensex is currently in a consolidation after hitting all time high indicating lack of momentum across all the time frames. Though our bias still remains positive, we observed some early signs of profit booking in this overstretched rally, hence traders are advised to wait and watch for short term corrections to create fresh longs. From current levels, the short to medium term trend still remains intact and the bulls to continue their bullish command into the markets towards 50500- 51500 levels. On the downside an immediate support is placed around 48900 levels however any violation of this support zone on closing basis may cause short term correction towards 48500-48000 levels. Major support zone is around 47500- 47000 levels.

Nifty 50

Trend – The index has seen signs of profit booking in the month of April after making new all-time highs of 15431 and finding support near the uptrend support line. During the end of the month, more than half of the earlier losses were recovered.

Pattern – The index has formed a bearish candle with a long lower shadow indicating buying at lower levels. Any pullback (if any) should be used as a buying opportunity. Major support is at 14150 going forward.

Momentum – On the weekly chart, the RSI has eased off the overbought territory which says that the momentum is sideways as of now. Good bullish momentum build-up was seen in sectors like Metals and Pharma.

Direction – The index is expected to trade in positive territory until it breaks 14000 on the downside.

Volatility – The weekly ATR has reached 507 points which means that Nifty currently has a range of 507 points for a given 2 For private circulation only. Volatility – The weekly ATR has reached 507 points which means that Nifty currently has a range of 507 points for a given week. Although on the daily timeframe, it has remained flat throughout the month with few ups and downs indicating the trend in still intact. INDIAVIX (23.02) has dropped around 11.54% which means volatility had remained same.

Market breadth – Nifty has been underperforming the NSE Midcap and NSE Smallcap index on the monthly timeframe indicating that the overall market breadth is mixed. 415 stocks of NSE 500 index are above the 200-day SMA indicating the larger trend has been stable. The breadth has declined as compared to last month where 426 stocks were above the 200-day MA

Our take – Nifty is currently in a consolidation after hitting all time high indicating lack of momentum across all the time frames. Though our bias still remains positive, we observed some early signs of profit booking in this overstretched rally, hence traders are advised to wait and watch for short term corrections to create fresh longs. From current levels, the short to medium term trend still remains intact and the bulls to continue their bullish command into the markets towards 15300- 15500 levels. On the downside an immediate support is placed around 14700 levels however any violation of this support zone on closing basis may cause short term correction towards 14500-14400 levels. Major support zone is around 14200- 14000 levels.

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