Is the Nifty Rally for Real? Key Levels to Watch for Breakout or Breakdown

Friday’s Pick

Swing BALKRISIND CASH 2450—2625 (200Qty) 35000/-
ENDURANCE CASH 2110—2274 (200Qty) 32800/-
Short Term ALKEM CASH 5196 to 5418 (200Qty) 44400/-

Nifty Technical view

The Nifty index is showing a Bullish Piercing Line candlestick pattern on the weekly charts, indicating a likely continuation of its upward trend. From a technical standpoint, as expected, the index bounced back from the support level within its rising channel. Looking ahead, we anticipate the market to challenge the upper boundary of this channel, around 23,000 or even higher. Therefore, the strategy is to buy on dips, at least until the elections. On the downside, the immediate support level is at 22,300, and if this level is breached, the Nifty could drop to 22,100. Given the significance of the upcoming final phases of the election, traders should exercise caution.

Indian Vix
Indian Vix spiked again and surpassed the 20 mark on Saturday. Typically, increasing volatility creates a challenging environment for bulls. The India VIX, also known as the fear index, increased by 3.67 percent, rising to 20.53 from 19.8 levels.

The Nifty Put-Call ratio (PCR), which reflects market sentiment, increased to 1.24 on May 18 from 1.23 in the previous session. A rising PCR, or a level above 0.7, especially surpassing 1, suggests that traders are selling more Put options than Call options, typically indicating a strengthening bullish sentiment in the market. Conversely, if the ratio drops below 0.7 or approaches 0.5, it indicates that selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.

Stocks in the news:
IRFC: Indian Railway Finance Corporation (IRFC), a Miniratna Public Sector Enterprise, reported significant financial growth for the quarter ending March 31, 2024. The company achieved a net profit of ₹1,717 crore, marking a 33.6% increase from ₹1,285 crore in the same quarter the previous year. Additionally, the total revenue from operations rose by 1.73%, reaching ₹6,473 crore compared to ₹6,193 crore in the corresponding period last year. In light of these positive results, IRFC has recommended a final dividend of ₹0.70 per equity share of ₹10 for the fiscal year 2023-24. This announcement reflects the company’s robust financial health and its commitment to providing value to its shareholders.

India Cements: India Cements reported a reduction in its net loss to ₹29 crore for the quarter ending March 31, 2024, an improvement from the ₹218 crore loss in the same period the previous year, as per an exchange filing on May 20. Despite this year-on-year improvement, the net loss increased sequentially from ₹16.51 crore in the December quarter. This marks the fifth consecutive quarter of losses for the company. The improved year-on-year performance is attributed to better sales volume and stringent cost control measures, despite lower cement prices. However, the company’s revenue from operations declined by 14.7%, amounting to ₹1,245.38 crore in Q4FY24, down from ₹1,460.47 crore in the corresponding period last year. The company primarily operates in South India.

Nifty and Bank Nifty Support and Resistance

Nifty: –
Resistance 22510, 22530, and 22550
Support 22480, 22470, and 22450
Bank Nifty:
Resistance 48210, 48247 and 48291
Support 48133, 48106, and 48062.

Index Future levels

Nifty Futures Buy near 22600. The suggested targets for this are 22,800 and 22,900, with a stop loss set at 22,400

Bank Nifty future Buy above 48,300 , the index is expected to see up side levels of 48,600 and 48,800, and level 48,000 will act as a stop loss.

Today’s Fundamental Pick : Welspun Corp Ltd

Buy ₹629 with a stoploss of ₹615 and a target of ₹657.

The Welspun Group is one of India’s rapidly growing conglomerates, holding leading positions in various sectors such as Line Pipes, Home Textiles, Infrastructure, Warehousing, Retail, Oil & Gas, Steel, Advanced Textiles, and Flooring Solutions. Welspun Corp Limited, the flagship company of this USD 2.7 billion group, is a preferred supplier to numerous Fortune 100 Oil & Gas companies. The company operates facilities in India, the UK, Saudi Arabia, and the USA, offering comprehensive manufacturing solutions for various pipes. Their notable clients include Shell, Saudi Aramco, TOTAL, Chevron, Energy Transfer, South Oil Company, ExxonMobil, Kinder Morgan, TransCanada, and Enbridge. Recently, Welspun Corp has established a new USD 100 million manufacturing facility in Little Rock, Arkansas, USA, and acquired the Portuguese company Sorema Tapates e Cortinas de Banho SA for USD 600 million.

In the past 7 days, WELCORP’s stock has risen by 7.8%. During the March 2024 quarter, promoter holdings increased from 49.96% to 50.14%. Over the last three quarters, WELCORP’s revenue has consistently grown, from ₹4.11K crore to ₹4.81K crore, averaging a 7.4% increase per quarter. Mutual funds increased their holdings from 4.96% to 6.35%, and foreign institutions raised their stakes from 10.56% to 10.70% in the same period. Over the past three years, WELCORP has outperformed the top five stocks with the highest market capitalization in the Iron & Steel sector. In the last year, NMDC Ltd delivered a 166.4% return, surpassing WELCORP by 5.5%.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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