Nifty to trade in 17800-18400 range, Bank Nifty remains in uptrend; RIL, TCS among top money-making ideas

November 15, 2021 9:06 AM

Nifty to trade in 17800-18400 range, Bank Nifty remains in uptrend; RIL, TCS among top money-making ideas

Nifty, bank nifty, stock marketNifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy

By Rajesh Palviya

On the weekly chart, the index has formed a small Bullish candle carrying lower shadow indicating buying support at lower levels. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart indicating positive bias. The chart pattern suggests that if Nifty crosses and sustains above 18100 level it would witness buying which would lead the index towards 18300-18500 levels. However, if the index breaks below 17800 level it would witness selling which would take the index towards 17600-17400. Nifty is now well placed above its 50-Day SMA (17795) indicating positive bias in the short term. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 18400-17800 with mixed bias.

The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias

Nifty Derivative Outlook

Nifty futures closed at 18133 on a positive note with 6.32% decrease in the open interest indicating Short Covering. Nifty Futures closed at a premium of 8 points compared to the previous day premium of 18 points. Index options PCR is at 1.16 v/s 0.83 & F&O Total PCR is at 0.88. Nifty Put options OI distribution shows that 17500 has highest OI concentration followed by 18000 & 17400 which may act as support for current expiry. Nifty Call strike 18000 followed by 18500 witnessed significant OI concentration and may act as resistance for current expiry.

Bank Nifty Outlook

Bank Nifty started the week on a flat note and selling pressure throughout the week led it to close in negative territory. Bank Nifty closed at 38733 with a loss of 840 points on a weekly basis.

On the weekly chart the index has formed a sizable bearish candle and closed below previous week’s low indicating weakness on a short term basis. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating negative bias. The chart pattern suggests that if Bank Nifty crosses and sustains above 39100 level it would witness buying which would lead the index towards 39600-40200 levels. However if the index breaks below 38300 level it would witness selling which would take the index towards 37800-37300. Bank Nifty is now well placed above its 50-Day SMA(38264) indicating positive bias in the short term. Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 40200-383000 with mixed bias.

The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias.

Bank Nifty Derivative Outlook

Bank Nifty closed at 38871 on a negative note with a 12.73% decrease in open interest indicating Short Build Up. BankNifty Futures closed at a premium of 29 points compared to the previous day discount of 78 points. Bank Nifty Put options OI distribution shows that 38500 has highest OI concentration followed by 38000 which may act as support for current expiry. Bank Nifty Call strike 39000 followed by 39500 witnessed significant OI concentration and may act as resistance for current expiry.

Sectors and stocks to watch this week

We expect capital goods, Cement, real estate, telecom and IT sectors to do well in the near term. One can focus on stocks like Reliance Industries Ltd (RIL), Bharti Airtel, L&T, Siemens, DLF, ACC, Ambuja Cements, Grasim Industries, TCS (Tata Consultancy Services), Mindtree and Coforge for coming sessions.

(Rajesh Palviya, VP– Research (Head Technical & Derivatives), Axis Securities. Views expressed are the author’s own.)

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