Nifty
NIFTY: 25178.65 In our previous update WE had indicated the Nifty could trade in a range of 25380 – 26000 for the coming few days. The index did that till Thursday recording 3 intraday lows around the 25400 mark before breaking below it on Friday and closing at 25178. .
With a weak closing on Friday the short-term moving averages and the indicators have turned southwards, suggesting that the index could face more downside pressure. In this scenario it is important to mark the trendline support around the levels of 24950 – 24930 zone (levels highlighted in the chart above).
This level is expected to act as an important support again, but in case the nifty breaks below 24900 expect the intraday low of 24570 – 24600 (registered on 01 Feb – budget day to be revisited). On the upside key averages are placed at levels of 25560 – 25600 and unless the nifty starts closing above this zone, the undertone could remain bearish.
Nifty Summary:
Upside resistance 24560 – 24600 (upside reversal only if nifty closes above this) Downside support 25100 (minor support) / 24950 – 24920 (important support) and then 24600
Bank Nifty
Bank Nifty: 60529 The most important observation to be made on the chart Nifty is the negative divergence observed between the price and momentum indicators. As highlighted the Banknifty index made a fresh high where at the same time the momentum indicators failed to make a fresh high of their own.
Typically, negative divergence in an uptrend is a signal of momentum or the force declining and could suggest a broader retracement (pullback) or a trend reversal in some cases. Looking at the chart above the level of 60200 therefore will assume a lot of importance. A break below the zone of 60200 – 59950 (59950 being an important short-term moving average level) could suggest that the uptrend would go through a phase of correction to levels of 59225 or 58450 also.
With this, now the level of 60200 can be counted as an immediate trend decider level. As long as the Banknifty remains above 60200, the directional bias for the banknifty will remain on the upside. Furthermore, while the level of 61680 / 62000 are near term targets, there is a possibility of the banknifty getting to levels of 62500 or above.
In case the Banknifty stays above 60200, it might still struggle at higher levels with resistance coming in at 60715 or 61250.
Nifty Healthcare
Nifty Healthcare 14871.10 – This week we are featuring the Nifty Healthcare index, which has stocks like Lupin / Sun pharma / Laurius labs / Glenmark and other stocks as its main constituents.
One can clearly observe that the level of 15100 – 15150 has been a very important resistance level for the Nifty Health care index. While the Nifty Healthcare index has broadly out performed the nifty, IT needs to close above 15150 to gain further momentum and it could then may be try and test levels of 16000 / 16500. A failure to do so could take the healthcare index down to levels of 14600 – 14500 zones.
Traders can look at the breakout on index levels and then the charts of individual stocks to identify trading opportunities.
Analyst - Mitessh Thakkar
President - Retail Research,
Bonanza Portfolio Ltd.
Disclaimer: This research report has been published by M/s. Bonanza portfolio Ltd and is meant solely for use by the recipient and is not for circulation. This document is for information purposes only and information / opinions / views are not meant to serve as a professional investment guide for the readers. Reasonable care has been taken to ensure that information given at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. If this report is inadvertently send or has reached to any individual, same may be ignored and brought to the attention of the sender. Preparation of this research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Past performance is not a guide for future performance. This Report has been prepared on the basis of publicly available information, internally developed data and other sources believed by Bonanza portfolio Ltd to be reliable. This report should not be taken as the only base for any market transaction; however this data is representation of one of the support document among other market risk criterion. The market participant can have an idea of risk involved to use this information as the only source for any market related activity. The distribution of this report in definite jurisdictions may be restricted by law, and persons in whose custody this report comes, should observe, any such restrictions. The revelation of interest statements integrated in this analysis are provided exclusively to improve & enhance the transparency and should not be treated as endorsement of the views expressed in the analysis. The price and value of the investments referred to in this report and the income from them may go down as well as up. Bonanza portfolio Ltd or its directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information / opinions / views. While due care has been taken to ensure that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of M/s. Bonanza portfolio Ltd shall be liable. Research report may differ between M/s. Bonanza portfolio Ltd RAs and other companies on account of differences in, personal judgment and difference in time horizons for which recommendations are made. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. Research analysts have not received any compensation/benefits from the Subject Company or third party in connection with the research report.
