NIFTY Index Chart Analysis

Nifty Indecisive At Crucial Levels , Karnataka Elections Eyed

Indian benchmark indices are off their decisive levels; however, the indices are seen straggling at higher levels. Markets are moving range-bound with cautiousness ahead of the Karnataka elections to be held on May 12, the results of which will be out on May 15. So far, Indian markets have duly digested the rise in global oil prices to multi-year highs as well as dollar appreciation against most other currencies. The corporate results and favourable monsoon expectations are keeping the markets going, with the earnings keeping the market breadth slightly positive.[EasyDNNnews:PaidContentStart] On the global front too, despite subdued Asian markets, the US markets recovered from their lows, which kept the overall global sentiments positive. The FIIs have turned net sellers in Indian equities with diminishing net equity investments in 2018 in the wake of capital flight to the US markets. The DIIs have been buying in the markets, thereby counterbalancing the FIIs' sell-off. However, the DIIs have majorly invested in safe havens like gold and other commodities. The corporate earnings growth has not led to rise in the price of every stock, rather many stocks saw profit-booking at higher levels, as the results have been already discounted. On the contrary, many sectors and stocks witnessed bottom-fishing despite worse-thanexpected results, especially banking and metal stocks. The recovery in the heavyweight sectors of banks and financial institutions has cushioned the market at the decisive levels. The broader markets have underperformed the benchmark indices, posting losses during the period. 

Technically, Indian benchmark index Nifty is striving at its multiple resistance levels of 10630-10640. After witnessing a breakout on April 27, Nifty surged nearly 1.5%, but it failed to sustain and retreated as if for a pullback. Nifty plunged near the resistance level for three consecutive days and attempted a bounce-back. Meanwhile, markets have been witnessing intra-day volatility amid corporate earnings. The lack of momentum is refraining the markets from gaining ground.

Going forward, on the weekly time frame, Nifty had witnessed a breather in the last week, after five consecutive upticks. For any sustainable upmove to emerge, Nifty will have to move past the 10,785-mark on a closing basis, and unless that happens, a sustainable upmove will continue to elude us, exposing the market to some more consolidation in a capped range. However, if it fails and retreats below 10,600, then 10470 and 10370 would act as 38.2% and 50% retracement levels, respectively.

 On the daily time frame, if Nifty continues with the bounce, we hold 10760-10785 as the immediate resistances, followed by 10,910. Above that, we can talk of 11,000, or a new all-time high in the making. On the other hand, if Nifty turns back, we hold 10600-10515 as the supports. 

STOCK RECOMMENDATIONS
JINDAL STEEL AND POWER ............. BUY ................. CMP Rs 261.60
 BSE Code : 532286
Target 1 .. Rs280
 Target 2 ..... Rs285
Stoploss....Rs240(CLS)

The stock of Jindal Steel & Power is currently trading at Rs255.55. Its 52-week high and low stand at Rs294.15/ Rs103 made on January 23, 2018 and May 23, 2017, respectively. Considering the weekly time frame, the stock had witnessed a prolonged rounding bottom pattern breakout at Rs208 during the first week of January, and thereafter, it continued to rally up to the 52-week high. The stock corrected up to 61.8% retracement during March 23 week and bounced back up to Rs265. The stock is seen consolidating for four weeks. Considering the daily time frame, the stock broke out of a downward sloping channel pattern on April 13, followed by a pullback and a bounce. Now, the stock is trailing at multiple resistance levels of Rs260-265. Meanwhile, the stock has taken support at 100-day EMA level every time it has corrected. The reasonable volumes and 14-period RSI quoting at 57 level suggest momentum going forward. We recommend a BUY. 

 TATA CHEMICALS ........................ BUY ...................... CMP Rs763.10
 BSE Code : 500770
Target 1 .. Rs830
Target 2 ..... Rs850  
Stoploss....Rs710(CLS)


The stock of Tata Chemicals is currently trading at Rs766.90. Its 52-week high/low stand at Rs786.95/Rs588 which were made as on May 4, 2018 and August 11, 2017, respectively, which depicts an uptrend. The stock has just broken its previous 52-week and all-time high level on May 4 after resisting thrice from January 11 to 15. Meanwhile, considering the daily time frame, the stock formed a strong base near its resistanceturned-support area of Rs650-660. 

The stock hit a kind of double bottom within the range, where it also took 200-day EMA support. Recently, the stock is seen trailing at the 38.2% retracement on a closing basis of the prior upward rally from Rs710 level to all-time high. The stock is consolidating at higher levels with growth in volumes and 14-period RSI downward sloping trendline breakout at 60, which is currently quoting at 67 level. We recommend a BUY.