DSB Market View: 24June and Ahead

From 5470 to 6220 in 2 months was a great rally with a lot of FII funds flowing in, but DII action was missing. Now, there seems a hope from DIIs. Supports are coming and breaking and the market once again is drifting lower after reaching the 6200-6300 zone. This has been the case for the last 5+ years. We are bullish and believe that a new high will be made in the coming months. NIFTY 7000 in 2013 itself? No comments.

Coming to the current scenario, first have a good look at the monthly chart of Nifty for last 6 years period.

NIFTY Monthly Chart. Charted on by DalalStreetBulls

As the chart shows, Nifty has been taking support at the rising trendline on the monthly charts with the next support on the line lying at 5520. So, this gives a very strong support at 5500. Also, 5500 is a crucial level which many analysts see as a pivot level for the bullish and bearish market. ( Bullish above 5500, Bearish below 5500 ). Also, as the rising trendline makes a bullish channel which has the current upper range at 6300. If we take a support at 5500 levels, a good upmove can be seen till 6300 once again. Now, this makes a squeeze. The market range is getting narrower. Look at the volumes too, they are not showing a pattern but make our belief stronger that soon a big fund inflow will happen and rally Nifty to new highs.

What could be the trigger?
The government is looking to increase the FDI cap in many areas which will boost the inflow of funds. This event could happen in July end or August. This will be a green signal for the foreign funds. Also, this move will be crucial for the government because they see it as a measure to stop the dollar rising. Also, next month kicks in the Q1 results. Watch out for surprises.

NIFTY Short Term View

For the coming few days, the short term moving averages make a bearish view by crossing the medium and long term MA from above. Support levels for NIFTY are 5660, 5600, 5550 and 5500. On the upside, the index faces resistance at 5750, 5780 and 5850. For those who trade NIFTY for intraday, we advice having a 20 point stop loss.
Trades can be initiated as below (Spot Levels):
 BUY above 5660, SL: 5645-5660 (20 points of your buying price), TGT: 5720/5750.
SELL near 5750, SL: 5750-5770, TGT: 5700/5670.
BUY above 5750, SL: 5730, TGT: 5780/5800/5850.
SELL near 5850, SL: 5870, TGT: 5780/5760.
SELL below 5660, SL: 5680, TGT: 5620/5600.
SELL below 5600, SL: 5620, TGT: 5550
BUY near 5500, SL: 5480, TGT: 5600/5620+
Follow our levels as advised. Keep in check your risk and the supports and resistances.

We see the range for Bank Nifty being 10880-11730. If an upmove is seen, BNF could fill the gap by kissing the 11730 mark. For short term, any slide till 11200 should be seen as a buying opportunity with SL at 11150. If 11400 is broken, put a 50 point SL and 11600 could be seen.
Supports: 11200, 11050, 10880.
Resistances: 11400, 11700.
As per our view, BNF should not break 10880 in the current scenario and a close above 11340 will keep the strength intact.

Bank Nifty

Bank Nifty Monthly Chart



Even a casual look at the chart shows that the bullish channel has broken. Downside on the S&P-500 is now open. Selling pressure might be seen and the correction could last upto 1480 levels. On the upside, we see the resistance at 1630 level. And don't see it breaking soon.

Dollar is at 60 and we won't post a chart here as we don't see any really low risk trade. We believe dollar will eventually come down to 56/55/52. But won't go into timing it yet. 58.5 is the low range for the current rally. People are saying 65 will come. It might come. Any trades taken will be intraday/BTST and will be updated on our facebook page. We look for swing opportunities. We hedge our forex trades. If bullish, we BUY Euro, Sell $ and if bearish we SELL Euro and buy $.
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