From the sectoral indices front, Midcap100, Metals, Realty & Media continue to look good while Auto Index is attempting to reverse from oversold territory.
By Rahul Sharma
US markets pulled back on Friday last week with the Dow Jones closing a shade below 35,000 mark. This has made a Doji structure on the major US Indices on weekly basis making the setup indecisive. Nikkei 225 is leading the recovery in Asia up by 1.5%.
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- Monday massacre: Sensex, Nifty nosedive nearly 1% each, are bears back to haunt Dalal Street?
The tug of war continued on Friday between the Bulls & Bears but the good thing is there is bullish divergence seen on the daily and hourly charts of Nifty. Both Nifty and Bank Nifty Futures saw fresh addition in positions but it was Bank Nifty that saw volumes spike. Options concentration is seen at 15,700 Puts and 15,900 Calls. Nifty supports are placed at 15,740 & 15,700 while 15,850 & 15,925 is expected to act as resistance. A close above 15,850 should help the index propel higher to challenge the 16,000 mark.
From the sectoral indices front, Midcap100, Metals, Realty & Media continue to look good while Auto Index is attempting to reverse from oversold territory. Bank Nifty remains a cause of concern as it is underperforming the broader market. 33,900 should act as major support to decide the trend from here. A close above 35,000 is a must for the current setup to improve. Nifty Financial Services Index is relatively better than Banknifty and needs a close above 15,860 for fresh upside.
Target – Rs 160/180
Metal counters have come back into the momentum buyer’s radar after a three-month consolidation background. SAIL saw rising volumes and delivery quantity in last two weeks along with a bullish pennant and pole pattern breakout. Expect it to test 160/180 on the upside with stop-loss placed at 125. (Chart source: Falcon7)
Target – Rs 650
SUNTV has broken out of its 1.5-year triangle pattern along with mega shift in volumes and delivery quantity. Futures saw rise in OI by 20.3% while 600 Calls witnessed maximum addition. One can buy with stop-loss at 540 and target of 650 and above. (Chart source: Falcon7)
(Rahul Sharma is the Director & Head – Research at JM Financial. Views expressed are the author’s own. Please consult your financial advisor before investing.)