Technical analysts expect the Nifty to move in a range of 15,500 and 15,950 in the short term. A sustainable move above 15,950 will be keenly watched as it would then accelerate the index towards 16,300 levels, said analysts. The Nifty fell 0.4% to close at 15.856.05 last week but outperformed most regional peers except Indonesia, Singapore and Malaysia. Analysts said Zomato may see some more buying following a 65% jump on its listing day on Friday.
Dharmesh Shah, Head - Technicals, ICICI Securities
Where is the Nifty headed?
A decisive breach above 15,950 backed by firm global cues and multisector participation would lead to a breakout from a six-week range and accelerate the momentum to 16,300 levels in the coming month. For the coming week, a lack of decisive breach above 15,950 would lead to extended consolidation in the 15,600-15,950 band with stock specific action as we progress through earnings season and monthly expiry.
Historically, the technical pattern has worked well for the stock on several occasions. When the stock formed the Golden Cross on June 11, 2020, it soared 25% from ₹1,600 to ₹2,000, said Siddarth Bhamre, director-alternative investments and research, InCred Equities. Similarly, it rose by 10.7% from ₹1,400 to ₹1,550 in October 2019 when this pattern was formed. In August 2016, the stock jumped 10% from ₹500 to ₹550.
The indicator has also given a wrong signal in November and July 2015 when the stock corrected after Golden Cross was formed, said Bhamre. This time, the undercurrent is cautious.
“Despite the recent correction, the trend for the stock is positive. In the short term, the stock is likely to remain in a narrow band and stay volatile,” said Bhamre.
Analysts say long liquidation seen in Nifty while shorts have been rolled over in Bank Nifty, expect Nifty to trade in 15,500-16,200 range, Bank Nifty in 34,000-35,800 for July F&O Series. The Nifty ended Thursday at 15,790.45, up 0.66%, while the Bank Nifty closed up 0.73% at 34,827. The Nifty has outperformed having fallen 0.7% from its life high of 15,901.6 while the Bank Nifty has corrected almost 8% from its high of 37,708.75.
“The open interest in Bank of Baroda futures by number of shares is at a lifetime high and in SBI it is at the highest since September 2020,” said Siddarth Bhamre, director-alternative investments and research at InCred Equities. “If SBI crosses the previous lifetime high, then it can see a substantial upside. SBI shares, which rose 2.4% to close at Rs 411 on Monday, touched a lifetime high of ?427.70 on February 18 this year.
Nifty PSU Bank index gained 2% to close at 2,398.15 on Monday, with Punjab National Bank, Central Bank,
Indian Bank, Union Bank and SBI gaining 2-5%.
In the ongoing May series, SBI s shares are up 14.6% while Bank of Baroda s shares are up nearly 22%. Punjab National Bank s shares are up 13.5% during the same period.