 "Pre-market update: Trade set-up, key levels to watch out on Nifty on May 8")
Pre-market stock update for May 08, Wednesday: The NSE Nifty 50 may start today’s trading session on a flat note amid benign cues from global peers and the Gift Nifty futures.
At 07:00 am, Gift Nifty futures quoted at 22,400 as against the spot Nifty close of 22,303 yesterday.
Off late, the Nifty has been consolidating after hitting a fresh all-time high at 22,795 on May 3. Experts say that market is witnessing profit booking due to various factors, including a lower voter turnout in the ongoing Lok Sabha elections 2024 and higher valuations.
On Wednesday, stock specific-action will guide the market trend. Among sectors, banks and FMCG will remain in focus owing to the news flow at the respective sectors. Banks/ NBFCs have witnessed some selling pressure in recent days owing to RBI’s higher provisioning norms for project financing, while FMCG stocks dazzled on Tuesday on improved volume growth in rural demand.
That apart, shares of Bajaj Consumer Care, Bharat Forge, Canara Bank, Godrej Agrovet, GSPL, Hero MotoCorp, Larsen & Toubro, Piramal Enterprises, Star Housing Finance, Sula Vineyards, Tata Power, TVS Motor Company, Vijaya Diagnostic and Westlife Foodworld will be in focus as the companies announce Q4 results today.
In other news, stock markets in India will be conducting a Live trading session on May 18 (Saturday) to test an intraday switch from its primary site to the disaster recovery Site (DRS). Trading on May 18 will commence from the primary site from 9:15 am to 10:00 am; followed by a switch to DRS, from 11:30 am to 12:30 pm. Maximum price band for stocks to be capped at 5 per cent on May 18, the NSE said.
Should you be a buyer of seller today? Here’s what technical experts recommend:
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Rajesh Bhosale, technical analyst at Angel One, sees a possibility of intermittent intra-day rebounds on the Nifty 50 in the day ahead.
Given the recent rise in volatility and Nifty approaching intermediate supports such as the 89-EMA and the 61.8 per cent retracement level, there might be intermittent intra-day rebounds, said Rajesh in a note.
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The analyst adds that such rebounds should be used to reduce long positions ahead of the Lok Sabha election results. Immediate resistance levels for the Nifty are anticipated at 22,400 and 22,480, while immediate support is seen at 22,200 – 22,150, below which the index may decline towards 22,000.
The analyst adds that such rebounds should be used to reduce long positions ahead of the Lok Sabha election results. Immediate resistance levels for the Nifty are anticipated at 22,400 and 22,480, while immediate support is seen at 22,200 – 22,150, below which the index may decline towards 22,000.
Hrishikesh Yedve, AVP technical and derivatives research at Asit C. Mehta Investment Interrmediates, highlights that the Nifty has settled below, the low of the bearish engulfing candle, and the 34-Day Exponential Moving Average (DEMA) support, suggesting further pessimism.
On the downside, the Nifty will find solid support at 22,100-22,000 levels. On the upside, the NSE benchmark index will continue to face stiff resistance at 22,800. Overall, we expect the index to consolidate in the 22,000-22,800 range in the short term. In the immediate term, 22,100 and 22,000 will serve as solid support levels, while 22,500 and 22,800 will operate as obstacles to the Nifty, the analyst said in a note.
Commenting on the outlook for the Bank Nifty, Hrishikesh says technically, on a weekly basis, the Bank Nifty has formed a shooting star candlestick formation near its all-time high, indicating strong resistance near 49,975. Furthermore, the index broke the previous week's low of 48,343. As long as the Bank Nifty remains below 48,340, weakness could extend to 48,000 - 47,700. In the short term, 48,000 and 47,700 will serve as support points, while 49,000 and 50,000 will operate as resistance.
Flagging signs of caution, Om Mehra, technical analyst at SAMCO Securities draws attention to the formation of a classic head and shoulders pattern on the Nifty hourly chart, with the breakdown of the neckline at 22,400 causing a significant drop.
Om expects, the Nifty to fill the gap and head towards 22,180 levels. Short-term traders should wait for fresh long until the level 22,500 is crossed, he cautioned.
Similarly, the Bank Nifty hourly chart shows consistent lower lows and lower highs. Bank Nifty is holding at 50 per cent retracement; a drop below 48,180 can push it to 47,870, near the 61.8 per cent retracement, the analyst from Samco said in a note.
Global cues
Overnight, the US market ended on a flat note as benchmark indices trimmed gains amid a sharp fall in Disney shares. The S&P 500 and Dow Jones were up 0.1 per cent each, while Nasdaq slipped 0.1 per cent.
The US 10-year bond yield remained subdued at 4.467 per cent.
Among key commodities, Gold futures fell back to $2,320 levels, while Brent Crude Oil traded around the $83-mark. Bitcoin quoted around $62,600 levels.
This morning markets in the Asia-Pacific region displayed a subdued trend. Japan’s Nikkei was down over 1 per cent. Singapore, Australian and Malaysian benchmark indices traded around the flat note.