The bulls were driving the market throughout the week as we were witnessing daily new record highs in the Nifty 50. However, on Friday (June 4) trading session, the benchmark index turned volatile after the Reserve Bank of India (RBI) decided to keep the policy rate unchanged and closed slightly lower at 15,669.25 levels with a loss of 21 points while Bank Nifty settled around 35291.65 levels with almost 1 percent loss in a day. Overall, it was profitable weekly as the Nifty index gained more than 1.3 percent on a weekly basis and also made a new record high at 15,733.60 levels on the last trading session of the week.
On a sectoral front, the weekly gainers were Nifty Metal, Media, PSE, Realty and Commodities while prime losers were Nifty Consumption, FMCG, IT and financials. Technically, the Index has been trading in a Rising Wedge formation and tested the lower bottom of the formation, which suggests an upside movement in the index. Moreover, the index has been trading continuously above the Ichimoku Could formation, which confirms that the bullish trend may continue for the long term. The index has taken the support from 21 Moving Averages and formed a Hammer candlestick formation in the hourly chart which points out strength in the counter. A momentum indicator MACD is also trading with a positive crossover as well as above the zero lines, which suggests a bull-run for upcoming sessions. On a weekly basis, the Nifty may move towards the level of 15900/16000 levels while strong support is intact at 15450 levels.
Top Gainers and Losers for week ended June 4
The stock has taken a support at 750 level which is a 38.2 percent Retracement level of its previous up move which shows a northward movement towards its upside level. On a daily chart, the stock has given a breakout of accumulation phase which indicates a further upside movement in the counter. The stock has been trading with a positive crossover of 21*50 daily Moving Average which can be considered as a Bullish Crossover which shows a Bullish movement in the counter. At the present level, the stock has good support at 780-level, while resistance comes at 850-870 levels.
On a weekly chart, the stock has formed open Bullish Marabozu candle which is a sign of continuation of bull trend. Furthermore, the stock has touched a life-time high at 6009.95 and closed near to it which points out buyers are quite active. A momentum indicator RSI and MACD both have shown positive crossover on the daily chart which adds more bullishness to the price. Moreover, the stock has been trading above all the moving averages which further add strength in the counter. At present level, the stock has good support at 5,600 levels sustains above the 5,900 level can show new life time high in the counter.
On a weekly chart, the stock has been trading in rising wedge formation and tested the upper band of Falling Wedge formation crossing above it can show further upside rally. Furthermore, the stock has formed “Open Bullish Marabozu Candlestick” which suggests an upside movement in the counter. Furthermore, price has also moved above upper “Bollinger Band” formation; which suggests bullish rally will continue further for near term. At the present level, the stock has good support at 1,560 levels while resistance comes at 1,720-level, crossing above it can show 1,780 levels.
On a daily chart, the stock has given a breakout of its “Downward Sloping Trend line” which indicates an upside move in the counter. Furthermore, the stock has formed Open Bullish Marabozu Candle on a daily time frame which suggest strength in the counter. Moreover, the stock is trading above 21 as well as 50-daily Exponential Moving Averages which suggest a positive trend of the stock. Additionally, momentum indicator Stochastic (6) has shown a positive crossover, which indicates strength in the counter. At the present level, the stock has good support at 306 levels while resistance comes at 350 level crossing above it can show 370-390 levels.
On the daily chart, the stock has been rising continuously from last couple of days. The stock has given breakout of cup and handle pattern which suggests further upside movement in the counter. Technically, the stock has been trading in Rising Wedge formation with the support of 21-days Moving Averages. Moreover, the stock has formed Bullish Marubozu Candlestick pattern on a weekly time frame, which suggests bullish strength in the counter. In additions, spurt in volume was also observed on Friday (June 4) trading session, which confirms the buying interest among the trades. An indicator MACD and Stochastic is also a sign of bullish trend for the near term. At present, the stock may find the resistance at 135 levels while support comes at 110 levels.
Top five losers
Mahindra and Mahindra
After a negative opening, the stock has traded into narrow range for the week and managed to close above 800 levels. On the daily chart, the stock has good support at 790 levels with Middle Bollinger Band and 50-Days Moving Average, which suggest reversal in the counter. Moreover, the stock has been hovering above the slopping trendline and multiple support zones. So, based on the above technical aspect, we are recommending buy on dip strategy in the counter. At present, the stock has good support at 790-levels while resistance comes at 840-level crossing above it can show 870-880 levels.
During the week, the ITC has crossed the prior resistance of 217 but failed to sustain above it and settled around 209.55 levels on Friday trading session. On the daily chart, the stock has slipped below 100-Days Moving Averages and Middle band of Bollinger formation, which indicates bearish move in the counter. A momentum indicator RSI and Stochastic also showed some weakness, which confirms the bearish trend for the upcoming sessions. On the downside, the stock may test the support at 203 while on the upside it may find the resistance at 217 levels.
During the week, there were no significant changes in the Infosys script as it was trading in narrow range. On a weekly chart, the stock has been trading in Higher Highs and Higher Lows formation with average volume activity, which suggest upside move for the near term. Moreover, on the daily chart, the price has been hovering above Ichimoku Cloud formation, which confirms bullish presence for the long term. However, an oscillator Stochastic is showing negative crossover. At present, the stock has good support at 1320-levels while immediate resistance comes around 1420-level crossing above it can show 1450-1480 levels.
Despite the positive movement in Nifty 50, a few private banking stocks underperformed. Indusind bank was one of them. On a weekly chart, the stock traded into the range of 965 to 1040 throughout the week. Moreover, the stock has been trading above 50-weeks Moving Averages and also forming Cup and Handle pattern, which is a bullish continuation pattern and indicates a buying strength. A good volume has also been observed in the earlier weeks, which suggests buying interest among the trades. An oscillator Stochastic suggests bullish crossover. Hence, we are expecting upside move in Indusind Bank for the upcoming week. On the higher side, it may test the resistance at 1,120-levels while on the down side, support is placed at 885 levels.
The stock has traded into the range of 990-1,030 over the week. On the Friday (June 5) trading session, we saw positive momentum in the stock with half percent gains to close at 1,020 levels. On a weekly chart, the stock has formed Bullish Pennant pattern, which indicates a bullish move in the counter. Volume activities are raising gradually, which point to bullish movement. An oscillator stochastic witnessed positive crossover, which adds bullish strength for the near term. A breakout above 1,045 levels will drive the stock towards 1,090/1,140 levels. However, on the downside, there is a support at around 935 levels.
(The writer is Executive Director, Choice Broking)