Trade Setup For May 27: Nifty Showing Signs For Further Up Moves

With an easing in foreign selling and healthy domestic macro data, the overall trend for the market continues to be positive with no signs of reversal, according to analysts.

Easing in selling by foreign institutional investors and healthy domestic macro data supported positive sentiments in the market, according to Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd. "Overall, we expect the market to witness a gradual up move and see some volatility next week, as both election and earning season are nearing the end."

The overall trend continues to be positive as there are no signs of reversal yet, Ruchit Jain, lead research analyst at 5paisa.com said. "The higher end of the channel and the retracement levels indicate an initial hurdle in the range of 23,050–23,150 in the coming week and once this is crossed, we could see a continuation of the rally towards the 23,400–23,500 zone." 

Traders are advised to continue to trade with a positive bias and look for buying opportunities on any decline, he said.

The Bank Nifty indicated strength as the index has broken the short-term resistance of 48,260 levels and managed to close above it, according to Neeraj Sharma, assistant vice president of technical and derivatives research at Asit C Mehta Investment Interrmediates Ltd. "As long as the index holds above 48,000 levels, we expect it to test the levels of 49,500."

The GIFT Nifty was trading 9 points or 0.04% lower at 2,335.38 as of 06:38 a.m.

Nifty May futures were up by 0.06% to 23,019.6 at a premium of 62.5  points, with its open interest up by 5.02%. Nifty Bank May futures were up by 0.42% to 49,045.15 at a premium of 73.5 points., while its open interest was down by 2.46%.

Open interest distribution for the Nifty May 30 series indicates that the 23,000 level is seeing the most put strikes, and call strikes of 24,000 have the maximum open interest.

For the Bank Nifty options' May 29 expiry, the maximum call open interest was at 50,000 and the maximum put open interest was at 48,000.

Overseas investors turned net sellers of Indian equities after a day on Friday.

Foreign portfolio investors offloaded stocks worth Rs 944.8 crore. Domestic institutional investors stayed net buyers for the fourth straight session and mopped up equities worth Rs 2,320.3 crore, the NSE data showed.

After scaling fresh highs in early trade, India's benchmark indices settled flat on Friday as ITC Ltd., Reliance Industries Ltd., and Tata Consultancy Services Ltd. declined. The rise in shares of HDFC Bank Ltd., Larsen & Toubro Ltd., and Bharti Airtel Ltd. supported the benchmarks.

The NSE Nifty 50 settled 10.55 points, or 0.05%, lower at 22,957.10, and the S&P BSE Sensex ended 7.65 points, or 0.010%, down at 75,410.39.

The week ended May 24 marked the best week for the Nifty in over three months.

The NSE Nifty 50 and the S&P BSE Sensex rose 2.02% and 1.90%, respectively, this week—the highest percentage gain since Feb. 4.

Broader markets ended on a mixed note. The S&P BSE Midcap ended 0.23% higher, and the S&P BSE Smallcap settled 0.20% down.

On BSE, eight out of 20 sectoral indices advanced and 12 declined. The S&P BSE Telecommunications was the top performing sector, and the S&P BSE Services fell the most.

• Indian Oil Corp.: The company acquired a 100% stake in Mercator Petroleum for Rs 154 crore.

• TVS Motor Co.: The company announced the launch of the TVS HLX 125 with 5-gears in Tanzania.

• NTPC: The company's Q4 coal plant PLF was at 79.77% vs. 80.32% YoY, Q4 commercial generation was at 92.967 BU vs. 89.445 BU YoY and Q4 captive mine coal output at 7.87 MT vs 6.48 MT YoY.

• NTPC Q4 FY24 (Consolidated, YoY)

  • Revenue up 7.6% at Rs 47,622 crore versus Rs 44,253 crore (Bloomberg estimate Rs 45,278 crore).

  • Ebitda up 18.9% at Rs 14,195 crore versus Rs 11,943 crore (Bloomberg estimate Rs 13,115 crore).

  • Margin at 29.8% versus 27% (Bloomberg estimate 29%).

  • Net profit up 33.2% at Rs 6,490 crore versus Rs 4,872 crore (Bloomberg estimate Rs 5,331 crore).

  • Board recommends final dividend of Rs 3.25 per share.

  Glenmark Pharmaceuticals Q4 FY24 (Consolidated, YoY)

  • Revenue up 2.1% at Rs 3,063 crore versus Rs 3,001 crore (Bloomberg estimate Rs 3,331 crore).

  • Ebitda up 26.7% at Rs 504 crore versus Rs 398 crore (Bloomberg estimate Rs 513 crore).

  • Margin at 16.5% versus 13.3% (Bloomberg estimate 15.4%).

  • Net loss of Rs 1,218 crore versus loss of Rs 428 crore (Bloomberg estimate Rs 198 crore).

  • Exceptional loss of Rs 447 crore versus Exceptional loss Rs 800 crore

Stocks in the Asia-Pacific markets gained in early trade Monday, tracking Wall Street as risk appetite among traders rebounded on the expectation that the US inflation print for May is likely to come lower than expected.

The Nikkei 225 was 56.58 points or 0.15% higher at 38,702.69, and the S&P ASX 200 was 48.70 points or 0.63% higher at 7,776.30 as of 06:33 a.m.

University of Michigan's data showed consumers are expecting inflation to fall to 3.3% in May from 3.5% expected earlier in the month.

The S&P 500 Index and Nasdaq Composite rose by 0.70% and 1.10%, respectively, as of Friday. The Dow Jones Industrial Average rose 0.01%.

• US Dollar Index at 104.72

• US 10-year bond yield at 4.46%

• Brent crude up 0.16% at $82.25 per barrel

• Nymex crude up 0.21% at $77.88 per barrel 

• Bitcoin was down 0.19% at $68,554.06

The Indian rupee appreciated sharply against the US dollar on Friday amid the ongoing euphoria created by the RBI's massive dividend payout, even as the dollar index and crude oil prices traded flat.

The local currency strengthened by 18 paise to end at 83.09 against the greenback, according to Bloomberg. That's the highest level in more than two months Intraday, the legal tender strengthened by as much as 13 paise to Rs 83.15.