Nifty Index Chart Analysis

Indian markets are hovering at their all-time high levels but with gradual steps refrained by disappointing GDP numbers that stood at 6.1% for the quarter as against expected figure of 7.1%. Manufacturing PMI too slowed down to 51.6, yet remained above 50. Metal sector recovery amid better corporate earnings and the buoyant auto sales data offset the pessimism in the markets that helped Nifty to sustain above its psychological resistance level of 9600 mark. The week prior to this went in deep correction where markets failed to welcome GST rates with open arms; weakness among the global bourses added to the sentiments. Nevertheless, slight correction in the Nifty after hitting 9530 proved healthy and led a better jerk. All-in-all, Nifty is now witnessing a bull-bear fight, in-short a consolidation phase at the peak.

 Considering the daily time frame, Nifty has formed a Doji pattern after hitting alltime high at 9675 levels indicating tug of war between buyers and sellers. Moreover, the upside was not supportedby rising volumes. The 14-period RSI is quoting at 71 which suggests over-bought. Considering all this, if Nifty confirms the Doji by continuing the weakness in the coming session, would lead to a correction phase. In that case we hold 9590-9550 as the immediate supports followed by 9530-9500 levels. However, the consolidation could be a prolonged breather and we may see a new record for Nifty, where we hold 9750-9770 as the resistance levels. Considering the weekly time frame, Nifty has not yet given any major bearish reversal signals. This is supported by positive divergence in the price and volumes. Hence, we may see fifth consecutive upside weekly candle, may be with slight corrections during theweek. Post 9750-9770, Nifty has its next potential upside at 9930 levels. However, 14-period RSI on weekly too remains in the overbought zone that may lead to a correction. In that case 9445 followed by 9375 could also be tested by the Nifty. Yet, our medium to long term view remains constant where we see Nifty heading 10700-11200 mark with smaller hiccups in between.

 Now that the corporate earnings are almost done, we may see some less stock specific volatility in the markets. We are heading monsoon season and the favourable forecasts for 2017 may turn positive for the markets. 

Moreover, July 1 will be the GST implementation and thereby, markets may remain reactive driven by sector specific ups and downs.

KARNATAKA BANK ................... BUY ........................... CMP Rs175.95
BSE Code : 532652 BSE Code : 532254
 Target 1 ..... Rs188 | Target 2 ..... Rs198 | Stoploss....Rs164 (CLS)

 The stock of Karnataka Bank is currently trading at Rs175.85. Its 52-week high/low stands at Rs181.15 / Rs100.2 made as on June 02, 2017 and November 22, 2016. The stock is trailing at its 52-week high levels. Considering the weekly time frame, the stock has given a multiple resistance breakout at nearly160 levels with high volumes. Thereafter, stock witnessed a pull-back followed by a bounce. On the daily time-frame, the stock is trading above its crucial trendline breakout at 171 levels. The 14-period RSI too is quoting at 63 which suggests good momentum for now. Thereby, we recommend Buy in the stock at CMP up to 172 levels for a target of Rs188 followed by Rs198 and with a stop loss of Rs164.

The stock of Polaris is currently trading at Rs221.45. Its 52-week high and low stands at Rs232 and Rs141.10 respectively made on June 02, 2017 and November 09, 2016. Considering the daily time frame, the stock has given a symmetric triangle pattern breakout at 222 levels with justifiable volumes. Further, after breakout the stock has witnessed a pullback in the recent candle. Hence, any reversal from here would give better upward jerk to the stock. The 14-period RSI is quoting at 63 with positive crossover, which supports this momentum.

 Considering the weekly time frame, the stock has given a rounding bottom along with multiple resistance breakout at 217 levels. Hence, we suggest a Buy in the stock at CMP to 221.45 for a target of Rs250 followed by Rs260 and with a stop loss of Rs204