The biggest risk factor for the market to watch out for would be the deadly coronavirus
The benchmark indices started the week on a strong note and gained nearly 2 percent on May 17, with Sensex gaining 848.18 points, or 1.74 percent, to end at 49,580.73 and the Nifty closing 245.40 points, or 1.7 percent, higher at 14,923.20.
Among sectors, Nifty energy, bank, auto, metal and PSU bank indices rose 1-4 percent. BSE midcap and smallcap indices added 1.6 percent each.
“The markets have zoomed past a resistance block of 14,850 and this should keep the Nifty bullish. Strong support lies at 14,700 and the index would turn bearish if we break this level on a closing basis. If the Nifty can keep above 14,850, we can claim higher levels of 15,000 and then 15,200. If we break 14,700, the markets could fall further to 14,400,” said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
Among individual stocks, a volume spike of more than 100 percent was seen in Balkrishna Industries, Federal Bank and Colgate Palmolive.
A long buildup was seen in Balkrishna Industries and Trent, while a short buildup was seen in Escorts, Voltas and Cummins.
Here is what experts say investors should do on May 18:
Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services
The Nifty opened gap up above 14,750 and moved north throughout the session. It recouped losses of the last three sessions and closed near the day’s high with gains of around 250 points. Technically, it formed a healthy bullish candle on the daily scale and negated its formation of lower highs-lower lows of the last three trading sessions. It has to hold above 14,900 to witness an up move towards 15,050 then 15,150. On the downside, support exists at 14,700 and 14,600.
On the options front, Maximum Put OI is at 14,000 followed by 13,500 strike, while maximum Call OI is at 15,000 followed by 14,800 strike. Call writing is seen at 15,300 and 15,400 strike with unwinding at 15,000, while Put writing is seen at 14,800 then 14,700 strike. Options data suggests a higher shift in wider trading range in between 14,600 and 15,200 zones.
The Bank Nifty has to hold above 33,333 to witness an up move towards 34,000 and 34,250, while on the downside, support exists at 33,000 and 32,750.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in
The Nifty50 appears to be on the verge of a breakout as it erased losses of the last three sessions on May 17. The larger trend, however, will remain sideways unless the Nifty registers a strong breakout above 15,000 on a closing basis. Moreover, the price action of the last 50 trading sessions evolved into some sort of descending channel with valid touch points. As the Nifty is trading close to the upper boundary of the channel, a close above 15,000 can facilitate a sustainable upmove with bigger targets.
In between, the Nifty needs to sustain above 14,725 to retain a bullish stance as a lower close can again embolden the bears. Traders are advised to wait for a breakout above 15,000 before initiating long positions on the index.
Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities
On reports of a sharp decline in coronavirus cases in India, we saw a smart recovery in the market. The financial sector did extremely well and the Bank Nifty gained 1,000 points to close 4 percent higher. The markets rallied throughout the day and closed at the highest point of the day. If global markets remain supportive and domestic news flow is favourable, then we would see 15,000 or 15,050 at the opening on May 18.
A weak opening at around 14,870-14,850 will be a buying opportunity. The focus should be on financials, auto and commodities stocks with a short-term view.
Ashis Biswas, Head, Technical Research, CapitalVia Global Research
The Nifty witnessed some decisive trends and an attempt to overcome the resistance level around 14,950. While sustaining above 14,950 is vital from a short-term perspective, the market has to stay above the level to move towards 15,100-15,200.
Momentum indicators like RSI and MACD have to recover after staying neutral to bearish in recent times.
Ajit Mishra, VP-Research, Religare Broking Ltd
Markets started the week on a robust note, tracking favourable cues domestic and global cues. Upbeat global markets triggered a firm start, which got a boost from a decline in coronavirus cases. Markets are cheering early signs of virus peak and stability in the global markets. But, we feel, participants shouldn’t read much into a single-day rise and wait for a decisive break above 15,000 in the Nifty. For that, the performance of the banking and financial pack will be keenly followed. Participants should continue with a positive yet cautious approach and focus on risk management.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
