Nifty and Bank Nifty Rally: A Time to Buy or a Dead Cat Bounce?

Yesterday’s Pick:

PFC 25APR24 410 CE BUY…  Rs 11625 (1 lot)

JGCHEM BTST BUY…2800 (200 Quantity)

Short Term Pick ESCORTS CASH BUY …Rs 8000 (100 Quantity)

Short Term Pick VBL BUY CASH Rs 2000 (100 Quantity)

Daily Newsletter …Bank Nifty future Buy…. Rs 4500 (2 lot)

Banknifty Technical View:

The Banknifty index has displayed a candlestick pattern known as a Doji on its daily charts, indicating a lack of clear direction, as both bullish and bearish sentiments seem balanced. Simultaneously, the Bank Nifty has broken out of a symmetrical triangle pattern, surpassing its previous resistance level of 48,161.2. This breakout signals a strong bullish trend. Moreover, the index has been consistently forming higher highs and higher lows in its daily timeframe and remains positioned above moving averages, further supporting the bullish sentiment.

Indian Vix:

The India VIX, has dropped by 1.34 percent to reach 11.22. This marks its lowest point since November 15 of the prior year. With a four-day streak of decline, investors are feeling more at ease, as indicated by the term “bulls” becoming more comfortable. Essentially, a decreasing fear index signifies reduced market anxiety, potentially boosting investor confidence.

FII and DII:

According to provisional data from the NSE, Foreign Institutional Investors (FIIs) sold shares worth Rs 1,136.47 crore, while Domestic Institutional Investors (DIIs) also offloaded Rs 893.11 crore worth of stocks.

Put Call Ratio:

The Nifty Put Call ratio, which gives insight into market sentiment, jumped to 1.17 from 0.95 in the previous session. When the PCR rises, particularly surpassing 0.7 or reaching above 1, it means traders are selling more Put options than Call options. This typically indicates growing bullish sentiment in the market. Conversely, if the ratio falls below 0.7 or moves toward 0.5, it suggests that selling in Call options is higher than Put options, signaling bearish sentiment in the market.

Nifty and Bank Nifty Support and Resistance level:

Nifty: – Resistance   22,600, 22680 and 22800 levels.

Support      22,359, 22,300 and 22200 levels.

BankNifty: Resistance 48,210, 48,340 and 48,549

Support     47,800 followed by 47,670 and 47,460.

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 22,480.

Bank Nifty future Buy above 48,350 , the index is expected to see upside levels of 48,700 and 48800, and level 48,000 will act as a stop loss.

Stocks in the news:

Bandhan Bank: The lender said loans & advances increased by 17.8 percent year-on-year to Rs 1.28 lakh crore, while deposits jumped by 25.1 percent to Rs 1.35 lakh crore in the quarter ended March FY24.

Hero MotoCorp: The two-wheeler maker has received notices for a tax demand of Rs 308.65 crore with interest thereon of Rs 296.22 crore for six assessment years.

Today’s Top Pick: Bajaj Finance

Bajaj Finance: BUY 7400 |Target 7600| Target 8000| Stop loss 7200

Bajaj Finance is mainly engaged in the business of lending. BFL has a diversified lending portfolio across retail, SME and commercial customers with a significant presence in urban and rural India. It also accepts public and corporate deposits and offers variety of financial services products to its customers.

Assets under management (AUM) grew by 34 percent to Rs 3.3 lakh crore in the year ended March FY24, and the same in Q4FY24 increased by Rs 19,400 crore. New loans booked during Q4 FY24 rose 4 percent to 7.87 million.

Technical:  Bajaj Finance is nearing a significant breakout point on its daily chart, indicating optimism in the market. Monitoring the level of 7400 is crucial, as surpassing, it could signal a continuation of the upward trend, possibly with heightened trading activity. Furthermore, the stock is currently trading above its 21-day moving average, which could attract more market participants.