A close above 16,420 in June series could take Nifty to 16,600-16,660 levels: Gaurav Bissa

First week of June series is expected to remain volatile as Nifty may fail to sustain above 16,420 levels. Options data suggests that 16,000 is likely to act as an immediate support area,” says Gaurav Bissa, Vice President at Trustline Securities.

In an interview with ETMarkets, Bissa said: “Once the index closes above 16,420, it can test 16,600-16,660 levels in a quick manner.” Edited excerpts:

A roller-coaster week for investors but bulls managed to gain the upper hand. Benchmark indices closed with handsome gains – so what led the price action on D-Street?
Benchmark indices like Nifty and Bank Nifty managed to hold above the previous swing lows of 33,000 and 15,700 respectively and were seen trading in range thereafter.

Bank Nifty witnessed stark outperformance for days supported by stable moves in large names like

, , , and Axis Bank; this ensured the Nifty index also trades with a positive bias and gave a much-needed push to the Nifty.



How did the May series end and what is the outlook for the June series? Where do you see markets moving in the first week of the June series?
Major part of the May series witnessed intense pressure for benchmark as well sectoral indices. Though, the indices witnessed a bounce toward the end of the series one needs to wait for confirmation to arrive at a conclusion.

The outlook for the June series remains rangebound to mildly positive till the time Nifty trades above 15,700 levels.

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This is where 89-weeks EMA and Ichimoku cloud support are placed. Once the Nifty closes above 16,420 levels, it can witness further push toward 16,800-17,000 levels.

The first week of the June series is expected to remain volatile as the Nifty may fail to sustain above 16,420 levels. Options data suggests that 16,000 is likely to act as an immediate support area.

Once the index closes above 16,420, it can test 16,600-16,660 levels in a quick manner.

Sectorally, banks saw major buying action in the week gone by. What is your take on banking stocks, and will the momentum continue in June series as well? Any names which are looking strong?
Bank Nifty witnessed strong outperformance toward the end of the series led by an improved performance by heavyweights like HDFC Bank, Kotak Mahindra Bank, ICICI Bank, and

.

The structure of these stocks continues to remain strong, and declines are expected to be bought into. However, the index has moved well over its immediate breakout area of 34,800 implying the momentum may cool off near 36,400 levels.

Traders can keep

on the radar. The stock is currently witnessing consolidation and a close above Rs 930 will open roads to Rs 980-1000 levels.

Metals took a beating and fell more than 4%. What led to the price action and what should investors do?
Metal had been one of the strongest performing sectors, and also one of the last to witness a correction led by negative divergence on the RSI and MACD.

The index has seen a bounce on account of being oversold on smaller time frames.

On the daily chart, the index has support at 4,950 levels and a close below this can lead to incremental pressure on the index.

Traders and investors should wait for a follow-up buying to emerge above 5300 levels before taking a decision to buy into the metal names.

Dollar index hit a 1-month low. Do you think this will give some respite to equity markets?
Dollar index seems to have given a failed breakout from a Triangle pattern formed on the daily charts.

As long as the index trades below 102.5 levels it is expected to witness negative bias. However, the plunge will be fast once it closes below 101 levels which can then give a boost to equity markets worldwide.

Any trading rules that one should follow to manage risk amid volatility in markets?
One of the most common mistakes investors and traders do is to hold on to the weak stocks and averaging them on every fall and exit strong stocks in anticipation of a fall in them.

This leads to weak performance irrespective of how the markets behave.

One can keep a maximum loss of 2 per cent of capital in a single trade to minimize the extent of loss in a particular trade.

One should always trade once a pattern is confirmed as excessive volatility is bound to give false signals. This is a time to trade with lesser volumes as follow-up buying is still missing across the sectors.

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




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