Nifty Faces Breakout or Breakdown as Consolidation Nears Resistance

Nifty Technical view

The Nifty index has shown a bearish candlestick pattern on the daily chart, suggesting uncertain trading conditions. Despite three consecutive sessions of upward movement, the index seems to be taking a breather around the 22,310 levels, which is the 50 percent Fibonacci retracement level from its recent decline. It’s advisable to adopt a practical strategy of buying during dips and selling when there’s a rise until there’s clear and strong involvement from the bulls to sustain the momentum.

Indian Vix
High volatility, currently at its peak in 19 months, is creating discomfort for bullish investors and favoring the bearish trend. The India VIX, an indicator of fear in the market, has increased slightly to 20.27 from 20.20 levels. Experts suggest that unless there’s a significant decrease in the VIX in the near future, the Nifty is unlikely to experience stability or smooth movement.

Put Call Ratio

On May 15, the Nifty Put-Call ratio (PCR), reflecting market sentiment, declined to 0.92 from the previous session’s 1.02 levels. A rising PCR, especially above 0.7 or surpassing 1, suggests that traders are selling more Put options than Call options, signaling 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 outweighing selling in Puts, reflecting a bearish mood in the market.

FII and DII Data

Foreign institutional investors (FIIs/FPIs) persisted in selling Indian equities. On May 14, they net sold shares amounting to Rs 2,833 crore. In contrast, domestic institutional investors (DIIs) net purchased equities worth Rs 3,788 crore during the same period.

Stocks in the news

Berger Paints India :
Berger Paints India reported a 19.7 percent increase in net profit to Rs 222.62 crore in the March quarter compared to the same period last year. However, sequentially, the profit witnessed a decline of 25.8 percent. Revenue for the company showed a marginal rise to Rs 2,520.28 crore in the March quarter. For the entire fiscal year, revenue stood at Rs 11,198.9 crore, marking a 6 percent increase from the previous year. Additionally, Berger Paints India declared a dividend of Rs 3.5 per equity share.

Power Finance Corporation (PFC) :
Power Finance Corporation (PFC) reported a significant 18.4 percent year-on-year increase in net profit to Rs 4,135 crore in the March quarter. Revenue also saw robust growth, rising by 20 percent to Rs 12,243.7 crore, as disclosed by the company in a filing on May 15. The firm highlighted an improvement in asset quality during the final quarter of FY24, with net non-performing assets (NPAs) decreasing to 0.85 percent and gross NPAs declining to 3.34 percent. This marks an improvement from the figures reported in the December quarter, where net NPAs were at 0.9 percent and gross NPAs at 3.52 percent. Additionally, PFC announced a final dividend of Rs 2.5 per share for FY24, supplementing the interim dividends of Rs 11 already paid during the year. Furthermore, the company disclosed the appointment of Sandeep Kumar, an executive director at PFC, as the chief financial officer with immediate effect.

Nifty and Bank Nifty Support and Resistance level

Resistance 22,270, 22,310 and 22,380 levels.
Support 22,160, 22,130 and 22,070 levels.
Max Pain: 22200, PCR: 0.92

Resistance 47890, 47990 and 48150
Support 47560, 47460 and 47300
Max Pain: 47800, PCR: 0.79

Index Future levels

Nifty Futures Buy near 22250.The suggested targets for this are 22450 and 22550, with a stop loss set at 22080.

Bank Nifty future buy above 47950 index is expected to up side levels of 48250 and 48350 and level 47650 will act as a stop loss.

Fundamental Pick : Coal India

Buy at ₹470, target ₹490, stop loss ₹455

Coal India Limited (CIL), established in 1975, operates as a public sector undertaking under the Ministry of Coal in India. Renowned as the largest coal-producing company globally, it holds a significant position as one of the largest corporate employers in India, with a workforce exceeding 3.3 lakhs. Headquartered in Kolkata, CIL operates across 81 mining areas spanning 8 provincial states in India. The company’s core activities include the production, sale, and exploration of coal, along with related services. CIL is actively involved in the exploration, development, and extraction of coal and lignite reserves across the country. CIL’s product portfolio encompasses coal, coke, lignite, as well as washed and beneficiated coal, alongside tar and other by-products. The company is associated with renowned brands such as Gondwana, Rajmahal, and Eastern Coalfields, recognized for their superior quality coal and related products. Additionally, CIL provides services like coal washing, transportation, and consultancy to cater to diverse industry needs.

Coal India Limited (CIL) released its fiscal 2023-24 (FY24) January-March quarter results on Thursday, May 2. The company reported a significant 26 percent increase in net profit to ₹8,640.5 crore compared to ₹6,869.5 crore in the same period last year. However, revenue from operations for the fourth quarter of FY24 experienced a modest two percent growth, reaching ₹37,410.4 crore, as opposed to ₹38,152.3 crore in the corresponding period of the previous year. On a consolidated basis, the income during the January-March period decreased to ₹39,654.50 crore from ₹40,371.51 crore recorded a year ago. Notably, Coal India Limited contributes to over 80 percent of the country’s domestic coal production, signifying its crucial role in the Indian energy sector.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

Also read-Will US inflation add pressure on the dollar index today?

Recommended-RBI MPC Meeting 2024: What’s On the RBI’s Radar?

Want help on your Trade?

Chat With Analyst