By Rahul Shah

Markets back into grip of bulls. Nifty closed at 16352 and Sensex closed at 54884 both ending well on the weekly close after long time. India VIX also cooled off to 21.48 which gives confidence to the bulls to party. The sectoral indices traded mixed wherein banks and auto led the charge and rose over 3 per cent each. On the flip side, metal, pharma and realty ended with losses. The broader markets, despite a decent show in the second half, closed in the red wherein midcap ended lower by 0.8 per cent and smallcap by 3.4 per cent. On other hand FIIs continued to dump Indian equites, so far this month they have pulled out close to 53790 crore. Though the speed of selling has been cooled off in last week.

Sentiment also improved after minutes from the US Federal Reserve’s May 3-4 meeting gave no signals that officials could turn more hawkish soon to fight inflation and were backing half-percentage-point rate hikes in June and July, largely in line with expectations. However, oil price spiked to 2- month high of above $117/bbl, declines in June series F&O roll over and continued FIIs selling are major concerns

Again this week will be eventful week, as this is the last week to file earnings for India Inc., more than 1,300 companies are scheduled to report their quarterly numbers. Most of them are from broader markets. This will certainly induce volatility in the midcap and smallcap space in the next couple of days. Auto stock will be in focus, most of the stocks have caught momentum, couple of them also made 52 week high as well. Market will also keep an eye on auto sales data that will be released in the first few days of June. This will keep the auto block active. Analysts will also try to extrapolate the demand conditions and possible outlook of the segment from the data released by auto companies.

A host of macro data including March quarter GDP growth rate will be announced this week. The market will react to the numbers, given that the third wave of the pandemic had some impact during the quarter. Any revision in the forward estimates will also be under radar. The market will also keep an eye on purchasing managers index (PMI) data that will be released by S&P during the week. It will give an idea of demand at factory level.

Nifty has formed a Bullish Hammer candle on daily scale with long lower shadow indicating buying was visible at declines. It finally closed positive with gains of around 300 points after the declines of last three four days. It has been forming lower highs – lower lows from the last three sessions but now support based buying in the last hour could negate the immediate negative setup. Now it has to hold above 16061 zones for an up move towards 16400 and 16500 zones whereas supports are placed at 16061 and 16000 zones. The broader range for the nifty looks like at 16000 to 16600 levels.

HDFC BANK
Target: Rs 1440 | Stop loss: Rs 1360

HDFC Bank has formed base around 1290 zones and inched higher. It has also given range breakout on daily scale and holding well above the same. • RSI oscillator is also positively placed on the daily and weekly scale and supports are gradually shifting higher. • Considering the current chart structure, we advise traders to buy the stock for an up move towards 1440 with a stop loss of 1360

Coromandel International
Target: Rs1020 | Stop loss: Rs 910

Coromandel Int has given a breakout from falling channel and trading in the unchartered territory. It has formed bullish candle with noticeable volumes and gave highest daily close ever. RSI oscillator is also positively placed on the daily and weekly scale and supports are gradually shifting higher. • Considering the current chart structure, we advise traders to buy the stock for an up move towards 1020 with a stop loss of 910.

(Rahul Shah is Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)