Nifty Index Chart Analysis

Indian markets seem to have factored in the geopolitical tensions brewing across the globe and the weak kick-off to the domestic earnings season. Indian benchmark indices had witnessed a retreat from their all-time highs after tepid earnings of the IT giants and some of the major private sector banks. However, in the recently held Niti Aayog meeting, Prime Minister Narendra Modi announced the government's intention to speed up infrastructure development in the country. The proposed infrastructure push, coupled with better result estimates from cement majors, brought about a bounce-back in the markets. Although it is a reversal for the Nifty after three consecutive weekly downbeats, the markets appear to have got into a consolidation phase.

On the weekly time frame, Nifty has already given a bounce from its resistance-turned-support range of 8990-9020 levels. After hitting an all-time high at nearly 9274, Nifty retreated and subsequently bounced back for a reversal amid positive divergence in the volumes and prices. However, to confirm the reversal, Nifty should sustain above 9275 on a weekly closing basis. If it is just a breather for another southward correction, then we hold 9020-8990 as the crucial support, which would be a gap-filling move. After 8990, we hold 8747 as the next medium term support. On the daily time frame, Nifty has just taken a support at its 20-days EMA level and bounced back. In case it closes above 9220, followed by 9245 level in the coming sessions, we can expect fresh buying and witness a new all-time high in the Nifty. The reasonably higher volumes and 14-period RSI which is quoting at 60 lends it a momentum stability for now.

Summing it up, if Nifty sustains above the 9220 level at the end of April 2017, we may see trading on a positive or flat note in the month of May. On a weekly basis, Nifty is in a consolidation mode and markets will remain directionless in the near term, unless a breakout happens on either side, say 9274 on the upside and 9020 on the downside. The longterm outlook remains positive, where we hold 9415 as the next upside target in the medium term. Traders are advised to remain cautious ahead of the earnings season as earnings of major stocks may direct Nifty during particular trading sessions.

STOCK RECOMMENDATIONS

ORIENT BELL

BSE Code : 530365
Buy CMP : Rs.229.55
TGT 1 : Rs.257 TGT 2 : Rs.278
SL: Rs.200 (CLS)

The stock of Orient Bell is currently trading at Rs.229.55. Its 52-week high/low stand at Rs.247.8/ Rs.138.8 made as on April 24, 2017 and November 21, 2016. Considering the daily weekly time frame, it is a fifth consecutive positive week for the stock and the stock has given a multiple resistance breakout at Rs.205-210 levels during the previous week with huge volumes. Though the 14-period RSI is quoting at 77, the stock may see a slight correction and would bounce back for another rally. Similarly, considering the daily time frame, Orient Bell witnessed an inverse head & shoulders breakout at the Rs.210 level with high volumes. The stock may correct somewhat, may be up to Rs.225-210 due to profit booking and then bounce back or continue with the positive movement. Therefor, we recommend a BUY on the stock for a target of Rs.278 and a stop loss of Rs.200.

BALAJI AMINES

BSE Code : 530999
Buy CMP : Rs.394.45
TGT 1 : Rs.310 TGT 2 : Rs.449 
SL: Rs.365 (CLS)

The stock of Balaji Amines is currently trading at Rs.394.45. Its 52 week high and low stand at Rs.401.1 and Rs.185, respectively, made on April 24, 2017 and April 22, 2016. The stock is trading on a positive trend since its inception. Considering the daily time frame, the stock is trailing at its 52-week high levels and has been consolidating since March-end. The stock had given a multiple resistance breakout on March 28, which was also a kind of an cup and handle pattern breakout at Rs.375-379 levels.

Recently, it has given a reversal after a pullback, taking support at its 20-days EMA level. The stock is headed back to its 52-week/all-time high levels. We recommend a BUY on the stock for a target of Rs.433, followed by Rs.449 and a stop loss of Rs.365.