Was the past week a consolidation? It was a truncated but an action packed week. The opening was weak as Nifty slipped a percent on Monday. The benchmark, after taking a break on Tuesday, extended the losses on Wednesday to touch an intraday low of 5735, from where a dramatic pullback took place and Nifty surged 3% from the bottom of the day to end at 5911. However, this spectacular rally proved short-lived as the benchmark, after taking the second break of the week on Thursday, plunged a percent and half on Friday to finish the week at 5824, losing 0.3% over the week. While the positive higher-top higher-bottom formation continues on the daily chart, a negative divergence got formed on Wednesday when Nifty closed at 5911, higher than the close of 5910 made on 5th April but the RSI made a lower top as shown in the daily chart below. 5735, the low made on Wednesday, is the important support to watch out in the near term, a breach of which can take the benchmark to around 5575, the 61.8% retracement level of the 5348-5944 up move. On the upside 5944 is the crucial hurdle, a decisive crossover of which is required for the further up move.
FIIs were net sellers with the tune of ` 253.43 crore (prov. cash market fig).
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SKP SECURITIES: “Nifty future may face resistance at 5940-6000 and take Support at 5750-5700”.
KOTAK SECURITIES (Sanjeev Zarbade): We expect markets to continue to consolidate at current levels. The earnings season has started on a weak note following disappointing numbers from Infosys. Inflation at 9% for March 2011 raises risk of further monetary tightening (negative for banks). Crude oil prices have also stayed firm at USD 122 per barrel. Thus considering these negatives, a minor correction is not ruled out. As in our earlier outlooks, we continue to be positive on the IT (decline in Infosys could be a good opportunity to enter), Financials and Media sector. Capital Goods and Infrastructure provide a decent investment opportunity over the long-term. We remain negative on Cement”.
FAIRWEALTH SECURITIES: “As the Nifty closes below 5842 where the GRAVESTONE DOJI confirms the construction of this pattern. With this the Nifty will be on the bearish note until it is below 5944.Bears can start a short position at 5860 and above and the long traders are advised to liquidate their position at every rise and try to re-enter if the Nifty closes above 5944. In the next session, range for the Nifty may be at 5780-5860 and can get the resistance at 5906 and support may be at 5752 and finally at 5716. In the next session, Bank nifty is expected to trade in the range 11660-11861. Also, 11960 and 12060 might be strong resistance levels for Bank Nifty while 11550 and 11440 might act as other support levels. Traders are suggested to follow the strategy of selling at rise keeping in view the given resistance levels”.
BONANZA ONLINE: “Nifty made doji type candlestick pattern on weekly charts, which shows indecision among bulls and bears. Nifty is trading within 5735-5945 range. Volatility may be continuing in this range. Decisive price action may be seen, if Nifty maintains above 5950 or below 5735 levels. For trading during the coming sessions, trend deciding level is 5825-5840. If Nifty shows strength above 5840 levels then we may see rally to 5900/5950/6050/6180 levels. If Nifty doesn’t sustain above 5820 levels then profit booking till 5775/5700/5600 may also be seen”.
Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
For Monday | Buy | 5830-5860 | 5910-5940 | 5800 |
For the Week | Sell | 5950-6000 | 5800-5750 | 6050 |
BONANZA PORTFOLIO (Shanu Goel): “HDFC Bank and IndusInd Bank results on Monday are likely to influence the market sentiments. Nifty is consolidating in a range of 5,700-6,000”.
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat to positive tomorrow. Trade long in Nifty if it holds 5800 levels with a stop loss placed at 5780. Alternatively, trade short if it breaks 5780 levels with a stop loss placed at 5800 levels”.
ICICI SECURITIES: We expect the Nifty to trade in the range of 5700-6000 levels. On the lower side, 5780 is expected to provide crucial support to the Nifty. A breach of these levels can trigger fresh selling pressure. At the same time, positive movement in the Nifty can be expected only if it sustains above 5900 levels The Bank Nifty may trade with a negative to range-bound bias with resistance around 11900 levels. On the downside, immediate support is placed around 11500 levels. Strong support for the Banking index lies around 11200”.
PINC RESEARCH: “The index may be witnessing a consolidation phase after a strong rally that saw it rise from 5350 to 5944. Nifty made a sharp come back from the lows of around 5735 to make a high of 5921 before closing the week midway at 5825. There are broadly two possibilities which emerge from the last week’s price move. 1) Nifty spends some more time moving sideways for the next few weeks. This would mean that the current move would be a part of the consolidation phase 2) Nifty shows significant strength to give a breakout above 5930 above which it scales to much higher levels. If this scenario emerges, then it would confirm a start of a new trend which can see it advance to 6150 or beyond. One of the above two possibilities could emerge out in the coming week and hence the coming week promises to be quite fascinating. The Mid-cap continues to display good strength. We remain positive on this index and there is a good chance for it to scale higher post this consolidation phase”.
MICROSEC SECURITIES: “Technically, Nifty is facing a crucial resistance near 5980. If Nifty is able to maintain above 5980, an upward rally might take it to 6180 in the short term. However, Nifty has made a gap between 5530 and 5560. If Nifty breaches its crucial support of 5720, it may further go down to 5530. Traders are advised to maintain a strict stop loss at 5720 of the long positions.
For the coming week, first support of Nifty lies at 5720 and the resistance is 5875. If Nifty breaks 5720, it may further go down to 5660 and then 5530. However, if Nifty is able to sustain above 5875, the level of 5930-5980 would become the next target”.
JRG EQUITY RESEARCH (IndiTrade): “Despite of the heavy pull-back rally which emerged in the second day of trading, the market slipped in the final day. Considering the overall undertone of the market, the probability for any deep downside is very low. The technical indicators are adding concerns. MACD, even though it is yet to trouble the bullish outlook, is running out of momentum. RSI-14 failed to break the 70-mark once retracing from the overbought region. However the bullish crossover of stochastic oscillator is conveying hope. The critical level for NSE Nifty remains to be 5800 for the week ahead. A break below this can stretch the downside further. The first support is seen at 5715, which is the 200-days Simple Moving Average. The downside support, if breaks the 200-SMA, will be 5610. A fall below this is not expected below this at this point of time. On upside, the first and critical resistance for the week ahead comes at 5925, followed by 5970. The index has to succeed and remain above this for any sustained upside”.
MANSUKH BROKING HOUSE: “Remember we have said that any break out above 5,670-5,690 could shift the momentum in to bulls favour and we might see some sharp moves near to 5,850. Exactly to our expectation spot index rallied and touched the crucial level of 5,872 where we expect a major resistance zone (5,945-5,960). At current juncture we expect the same scenario in the upcoming sessions though possibility of profit booking around 5,945-60 couldn`t be rule out. Any closing above this level with substantial volumes for at least 2 consecutive days may generate another 2-3% return and we might see 6,070-6,080 in the current series. On the flip side any negative outcome from global side particularly from Middle East Asia may dampens the current euphoria. Moreover after a strong run from 5,376 to 5,944, technical indicators also shown some over bought conditions in near term. Therefore possibility of minor retracement near to 5,550-5,570 could be on higher side however any correction should be used to create fresh long positions”.
MANGAL KESHAV SECURITIES: “Nifty (Spot) is still trading in a Lower Top Lower Bottom price formation which indicates a long term Down Trend. Nifty (spot) witnessed a straight rally (Short covering rally last month) on a breakout above 5650 mark and hit an upper resistance level of 5960 mark. Volume analysis suggest this up move as an intermediate bull rally, one can clearly observe the price moving up and volumes shrinking gradually. Market should take a pause here as Nifty (spot) hit the upper channel resistance as well as falling trendline resistance of 5960 level. Currently, Nifty (Spot) is trading well below the confluence of 5960 resistance level and indicates a possible weakness in current trend. According to weak price pattern, the market should move further down once the distribution gets over. Fresh down move could begin once Nifty (Spot) breach the lower support of 5700 (200 DMA) mark. Technically, the short term support for Nifty (Spot) will be at 5700 & 5350 level while the resistance will be at 5960 level respectively where as a fresh breakout above 5960 level (Volume breakout is also essential) will push Nifty (Spot) till 6200 mark and is a sign of continuation of a bull run. Technical indicator like RSI has bounced from oversold level and is close to 50, indicates a resistance and possible weakness in the given trend. Though market bounced from the oversold zone substantial drop in volume signifies the lack of confidence among buyers and suggest weakness in the current up move”.
INDIRATRADE SECURITIES: “Market is in tight range 5950 to 5750. Thin volume noted in market due to holidays. Infosys Q4 weak results disappoint the market and IT stocks too. Nifty is in pressure due to rising inflation and weak global cues. We think that either side break out of nifty (5950 or 5750) will lead the market to 200 points on either side”.
ANGEL BROKING (Daily Outlook): “The trend deciding level for the day is 19,475/5,846 levels. If Nifty trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,613–19,839/5,886–5,947 levels. However, if Nifty trades below 19,475/5,846 levels for the first half-an-hour of trade then it may correct up to 19,249–19,111/5,785–5,745 levels”.
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