Edited excerpts from a chat:
What is your outlook for the May series and which levels should one watch out for given the trade set-up appears to be favouring bulls?
The current market sentiment reflects strong bullish momentum, with aggressive buying seen on dips, indicating dominant buyer activity. For Nifty, the key level to monitor is 22300, which has now transformed into a crucial support level on declines. A breach below this level on a closing basis would invalidate the uptrend. Meanwhile, the Bank Nifty has experienced mixed results this earnings season, with the fate of the index potentially hinging on ICICI Bank’s results. The index finds support at 48000, where the highest open interest is also concentrated on the put side, reinforcing the bullish outlook as long as this level is sustained.May has been a positive month for Nifty 7 out of 10 times in the last 10 years. Do you think this one will be tougher for bulls as we are already near peaks and FIIs have lightened long positions.
The recent aggressive selling by Foreign Institutional Investors (FIIs) has been effectively absorbed by domestic liquidity, a trend observed over the past few years and expected to persist. With ongoing elections, May could pose challenges if previously mentioned support levels are breached. The first half of May is anticipated to maintain the existing uptrend, while the second half will offer clearer insights into voter turnout and the favoured political party, shaping market sentiment accordingly.
Do you think Nifty Bank can reach its all-time high level of 49,057 in the coming week and possibly scale 50K in May?
For the Bank Nifty index, maintaining support above 48000 is crucial for sustaining the current uptrend. As long as this level holds, the bullish momentum is likely to persist. Anticipating a breakthrough of its all-time high and surpassing the 50000 mark in the coming weeks, once the index clears the critical resistance at 48600.
Cochin Shipyard was one of the top gainers in the week with 20% plus return. What is your prediction for the week ahead after reading the charts?
The stock has maintained a robust uptrend, consistently forming higher highs and higher lows on the daily chart. With immediate resistance at 1370, a breakout above this level is expected to enhance momentum, potentially driving the stock towards the 1450/1500 mark. As long as the lower end support at 1260 remains intact, the bullish outlook for the stock persists.
Give us your top trading ideas for the week.
Buy HUDCO at Rs 227. Stop loss: Rs 214. Target price: Rs 250/260
The stock has experienced a significant breakout on the daily chart, characterized by a sharp surge in trading volumes, emerging from a sideways consolidation pattern. This breakout is further supported by a positive crossover observed on the daily chart’s momentum indicator, the RSI, signaling a buy opportunity. Additionally, the stock is currently trading above its short-term moving average of 20DMA, reinforcing the bullish sentiment in the market.
Buy Deepak Nitrite at Rs 2,450. Stop loss: Rs 2,300. Target price: Rs 2,600-2,800
The stock is poised for a breakout from a rounding bottom formation observed on the weekly chart, indicating a potential bullish trend reversal. This sentiment is further supported by the momentum indicator RSI, which has recently given a positive crossover and surpassed the key level of 60, confirming the bullish momentum. Additionally, the stock has demonstrated a strong reversal from its 20-day moving average (20DMA) at 2300, suggesting solid support and acting as a cushion for bullish traders.
Buy City Union Bank at Rs 160. Stop loss: Rs 150. Target price: Rs 175/185
The stock is poised for a breakout from a rectangle pattern, suggesting accumulation at lower levels. Trading above both its short-term (20DMA) and medium-term (50EMA) moving averages indicates a bullish undertone. Additionally, the momentum indicator RSI has reversed from oversold territory and entered the strong buying zone, further supporting the potential for an upward move in the stock’s price.