Nifty’s June target at 15,700, Bank Nifty may hit 36,200 soon; BFSI, auto stocks may outrun

Nifty’s June target at 15,700, Bank Nifty may hit 36,200 soon; BFSI, auto stocks may outrun

By Dharmesh Shah

In the week gone by equity benchmarks entirely recouped last week’s losses and ended the week on a positive note at 15175, up 3.4%. Broader markets regained momentum and outperformed the benchmark by gaining 4%, each. Sectorally, barring FMCG, all other indices ended in green led by financials, auto and realty.

Nifty is now expected to challenge the life highs of 15400during this expiry weekBank Nifty outlook

– The weekly price action formed a strong bull candle with a higher high-low as on expected lines buying demand emerged around the 32000 levels being the 61.8% retracement of its April 2021 up move (30405-34287)– Key observation is that the index has registered a breakout above a falling supply line joining major highs of the last three months indicating resumption of the up move.– We expect the index to maintain positive bias and head towards 36200 levels in the coming month as it is the confluence of the 80% retracement of the entire last three months corrective decline (37708-30405) and the price parity with previous up move (30405-34287) as projected from the recent trough of 32115 signalling upside towards 36200 levels

We expect the index to maintain positive bias and head towards 36200 levels in the coming month

– Index in the smaller time frame has witnessed a faster retracement of the last falling segment as 11 session’s decline (34287-32115) was completely retraced in just five sessions. A faster retracement in less than half the time interval signals a robust price structure– The formation of higher high-low on the weekly chart signifies elevated buying demand that makes us assured to revise the support base higher towards 33000 levels as it is confluence ofa. The 61.8% retracement of the current up move (32115-34694)b. The rising 50 days EMA is also placed at 33130 levels– Among the oscillators, the weekly stochastic remain in uptrend and is currently placed at a reading of 70 thus supports the continuation of the positive bias in the index in the coming weeks

(Dharmesh Shah is the Head – Technical at ICICI Direct. Please consult your financial advisor before investing.)

ICICI Securities Limited is a SEBI registered Research Analyst having registration no. INH000000990. It is confirmed that the Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 22/04/2021 or have no other financial interest and do not have any material conflict of interest. I-Sec or its associates might have received any compensation towards merchant banking/ broking services from the subject companies mentioned as clients in preceding 12 months