US Fed event eyed! A close above 17,400 could give strength to bulls: Mehul Kothari

A volatile week for markets but bears remained in control for the week ended April 29. What led to the price action?
It was a disappointing week for the bulls on the D–Street since every attempt made by the markets to recover went in vain. Until the first half of Friday’s session, the benchmark index was doing well and almost reclaimed the 17,400 mark.

However, a sharp selloff during the fag end of the session forced the index to nosedive almost 300 points from the day’s high to close near the 17,100 mark.

The selling pressure seems to be completely global as the US indices are unable to hold ground. At the same time, the rising Dollar index ahead of the US Federal Reserve meeting has been dampening the overall sentiments.

On a monthly basis for April, benchmark indices ended flat with a negative bias. How is the market likely to pan out in the May series? What are the important levels that one should track in Nifty as well as NiftyBank?
During the month of April, the benchmark index lost over 2 per cent from March 2022 close but the bigger worry is that the index lost over 1,000 points from the top of 18,115. This indicates the dominance of bears.

Now, on the daily chart of Nifty50, we are witnessing a ‘Death Crossover’ of the 50-day moving average and the 200-day moving average.

Thus, till the time that is not negated the market is likely to remain under pressure on every rise. On the levels front, 17,400 is the strong breakout point for the coming week.

A close above 17,400 might boost some confidence in the bulls. On the other hand, 16,800 would be intermediate support on the downside. A breach of the same might drag the index towards the 16,600–16,500 mark which is the 61.8% retracement of the entire rally from 15,700–18,100.

With regards to Nifty Bank index, it has lost over 2,500 points from the monthly top of 38,765. We are witnessing a major channel breakout failure in Nifty Bank index.

In addition to this, even the Nifty Bank index has a ‘Death Crossover’ on a daily scale. Thus for the coming week, 37,000 would be a strong hurdle for the index.

Only a sustainable move above the same might bring in some hope for the banking stocks. On the contrary, a breach of 35,500 might drag the index towards 34,500–34,000 levels in the coming week.

Will sell in May go away come true in 2022? FIIs have sold more than Rs 37.000 cr in the cash market of the Indian equity markets in April.
That completely depends on the mega event of the US Fed. So far the short-term trend seems to be under pressure because of the mentioned death crossover but in the broader term, we see a slide towards 16,400 in Nifty as a buying opportunity for a few months.

BSE Small & Midcap indices rose more than 3.5% in April compared to flattish performance from Sensex and Nifty. What led the price action, and how should investors play this space in May?
Both the Midcap and Smallcap indices were not spared either. Earlier we saw the beating in heavyweights while during this week, we saw a correction in broader markets.

Eventually both the indices ended the months with marginal gains. With regards to BSE Smallcap index, we expect to dip towards the 28,000 mark which is the placement of its 200 DSMA.

Meanwhile, for the BSE Midcap index, 24,000-23,500 could be the strong support zone from where the buying could emerge.

Your 3-5 trading ideas for the May series for the next 3-4 weeks?
Here is a list of top trading ideas for the May series.

Hindalco: Buy above 490| LTP: Rs 483| Stop Loss: Rs 470| Target: Rs 530| Upside nearly 10%


On the daily chart, we are witnessing that the stock found support at the placement of its 200 DEMA. This support coincides with the placement of a bullish harmonic Alt Shark pattern.

The pattern has its potential reversal zone between 485 – 475. We are expecting a strong trading bounce in the stock from current levels.

Thus we advise traders to go long in the stock only above 490 with a stop loss of 470 for the upside target of 530 in the next 3 – 5 weeks.

Endurance Technologies: Buy| LTP: Rs 1213| Buy on Dips | Stop Loss: Rs 1,100| Target: Rs 1,370| Upside 12%

Since the past few sessions, we are witnessing positive price action in Endurance along with heavy volumes which indicates accumulation.

On a daily scale, we are witnessing a range breakout which suggests the possibility of an upside momentum from here on.

In addition, even the daily RSI has confirmed a breakout above the 50 level which adds more conviction to the bullish outlook.

Thus, traders can accumulate the stock in the range of 1220 – 1180 with a stop loss of 1100 for the upside target of 1370 in the coming 3 – 5 weeks.

Tata Power: Buy| LTP: Rs 242| Buy on Dips| Stop Loss: Rs 220| Target: Rs 280| Upside: 16%


In the course of its strong uptrend,

consolidated in a band of 260 – 200 for many months. Recently, it broke out from that range and almost tested the 300 mark. However, it is again at the breakout zone.

The target for range breakout comes around 320 but we are also witnessing a flag breakout on the larger time frame.

Thus we advise traders to go long in the stock in the range of 242 – 238 with a stop loss of 220 for the upside target of 280 in the next 3 – 5 weeks.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)