Banks Will Take Nifty To 16,000

May 31, 2021

Brijesh Bhatia, Research analyst

Hurrah!

It's time for celebration on D-street as Nifty cheers with a new all-time high closing of 14,469.65.

We have been consistently saying the Nifty is all set to hit new all-time high soon and here we are.

The party is not over yet. We are heading for 16,000 levels.

This is indicated by the technical structure as the Nifty is breaking out of a bullish channel pattern.

Which sector can lead the way for the Nifty?

Well, we witnessed Reliance Industries leading it to the new all-time high on Friday but the one sector which has approximately 34% weightage in Nifty is banking and financial services.

The Bank Nifty is likely to outperform Nifty in the next leg of the rally.

In this video, I'll show you why...

It's party time as Nifty hits all-time high. Well, last week we have seen index hitting all time high and we are highlighting this last probably around for 3 to 4 weeks. We have done a video, especially in our momentum moves or Fast Profits Daily, that Nifty is about to hit 16,000 and in the last week's video as well, we have highlighted that the market is ready to take a blast and here we are.

Myself Brijesh Bhatia. Welcome to the Fast Profits Daily. In this video, we will be discussing Nifty and one sector, which could take Nifty higher toward 16,000 levels.

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Well, last week was on Friday, especially, the king awakened I would say Reliance taking the lead merely around 7-7.5% gain during the day and it's being remarkable momentum by reliance taking Nifty to the all-time highs.

 

But if you look at the technical structure over Nifty over here, the weekly chart, it's clearly breaking out of the bullish channel structure and after a long, long time, last we've seen 15,431 was in February and probably markets rightly consolidated in a range and back towards all-time high.

So if I just look at the structure index is trading in a bullish break out. Plus if you look at the lower panel I have included ADX or the Directional Movement Index, where the blue line, which is the positive DI is clearly moving higher, indicating that still the strength is there in this momentum.

So our expectation of 16,000 still remains on cards and we are likely to move toward 16,000 levels. And when we are inter entering June, we think that 16,000 can be achieved in the June month.

So one sector which could take markets higher is, I think, banking and financial services. So let's look at the Bank Nifty over here.

I think Bank Nifty has underperformed for quite long and the first chart I want to show out here is the Bank Nifty to Nifty ratio chart.

 

If you look at the ratio chart, the major bottom formation has happened, if look at the lower side below the black rectangle lines. The major bottom formation was there. We broke out above that retesting the same levels again.

And now if you look at the right hand side, the green dash line or dotted line, it has formed a higher high, retested those high again, and I think this move would again be in outperformance for the Bank Nifty now. The Bank Nifty is which I believe that can take a huge rally on the upside looking at the ratio charts. What should we expect on Bank Nifty and what are the target we are expecting?

 

Let's look at the Bank Nifty. This is the daily chart over here of the Bank Nifty. If you look at the structure over here, it has broken out of the horizontal trendline, the black dotted line over here.

It has given a break out, retested those levels around 33,000-33,200 and if you look at the expiry, it was at the higher level of around 35,000 levels.

Now, even if you look at the momentum, it's still in the bulls court over here and if you look at the rising structure, which means that really was there, a consolidation and again on the expiry day, which was the last Thursday, we have seen a momentum building up again on the Bank Nifty.

Plus, if you look at the lower panel again, which we have seen the ADX on the Nifty chart, similar ADX has been there here on Bank Nifty also

So still in the bullish DI, which is a blue line, is trending bullish. So we believe that the Bank Nifty is ready to get a bigger rally. Probably 37,000-37,500 can be expected on the Bank Nifty over here.

Yes, the dips should again be an accumulation opportunity for bulls but we think the next leg of rally could be towards financials.

If you remember in the previous week, last week we have covered the PSU index and one should not fear to buy the PSU index.

So PSU also last week we have seen SBI right from 380-390 levels back to the 430 levels. Now PNB is gaining strong momentum. BoB is gaining strong momentum. Canara Bank is ready from a warm up.

Even if you look at the last week's Friday, HDFC was gaining momentum on Friday. So we believe, banking is ready for the next leg of rally, and you should not miss this Bank Nifty momentum, taking markets to the higher levels.

So just to conclude, Nifty we are ready for 16,000 and we are expecting markets to trend towards those levels, probably in the coming weeks and the Bank Nifty is the one which could take a lead in the next leg of rally for Nifty towards 16,000.

So signing off Brijesh Bhatia. Thank you.

Warm regards,

Brijesh Bhatia
Brijesh Bhatia
Research Analyst, Fast Profit Report
Equitymaster Agora Research Private Limited (Research Analyst)

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2 Responses to "Banks Will Take Nifty To 16,000"

Premkumar R

Jun 6, 2021

I feel that this is likely to take place sooner than later.

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Dilip Kumar Purwar

May 31, 2021

Mr Bhatia technical analysis is excellent. I have gone through his articles and find useful and he is only author in equity master recommend trading tip.
Most of the authors are bit confused and do not dare to give clear cut recommendation and not confident.

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Equitymaster requests your view! Post a comment on "Banks Will Take Nifty To 16,000". Click here!