The Indian stock market indices, Sensex and Nifty 50, are poised to open higher on Tuesday, buoyed by gains in global markets. Indicators from Gift Nifty also suggest a positive start for the Indian benchmark index. The Gift Nifty was trading around 23,590, a premium of nearly 130 points over Friday’s close of Nifty futures. On Friday, the domestic equity benchmark indices ended higher, with the Nifty 50 closing at a fresh high.
The Sensex rose by 181.87 points to close at 76,992.77, while the Nifty 50 settled 66.70 points, or 0.29%, higher at 23,465.60.
The Indian stock market was closed on Monday, June 17, for Eid ul-Adha 2024.
Nifty 50 Analysis and Prediction
On the daily charts, the Nifty 50 formed a long-legged doji, suggesting a possible reversal. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that the identical open and close at 23,465 levels, combined with the long lower shadow, indicates a long-legged doji pattern at new all-time highs. Typically, such doji formations after a significant up move signal caution for an impending trend reversal. However, given the range-bound movement, the likelihood of a significant reversal pattern forming is reduced.
The Nifty continued its range-bound action within 23,300 – 23,500 levels, showing no early signs of a breakout. According to Shetti, a decisive move above 23,500 could lead to an upside breakout, while a slide below 23,300 might indicate a downside breakout in the near term.
Key Predictions and Insights:
- Nifty 50 Outlook: The Nifty 50 is expected to continue its narrow range movement with a positive bias. The market closed higher by 66 points on Friday. Support levels are seen at 23,400 and 23,300, with significant positions held by put writers at these levels. A fall below these supports might shift the market balance towards the bears. Until then, it remains a buy-on-dips market.
- Higher End Resistance: A decisive move above 23,500 could lead to a sharp upside in the near term. V.L.A. Ambala from Stock Market Today (SMT) noted that Nifty was consolidating within a small range last week, forming a positive candlestick pattern on the weekly timeframe and a ‘Hanging Man’ pattern during the day’s session. Ambala suggests any dip between 5-12% should be considered a buying opportunity.
- Support and Resistance Levels: The Nifty is likely to find support between 23,320 and 23,220 and face resistance between 23,520 and 23,605 in the upcoming session.
Bank Nifty Analysis and Prediction
The Bank Nifty index gained 155 points to close at 50,002, where the highest open interest is built on the call side.
- Upside Breakout: Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, mentioned that the Bank Nifty index needs to decisively surpass the 50,200 mark to confirm an upside breakout towards the 51,000 level.
- Lower-End Support: The lower-end support is placed at the 49,500 – 49,400 zone. A break below this would open the gates for further downside towards 49,000.
In summary, both Nifty 50 and Bank Nifty are showing positive trends, with key support and resistance levels to watch. Investors are advised to adopt a thematic approach, focusing on fundamentally strong high-growth stocks from sectors such as logistics, green energy, advanced technology, defense, metal, infrastructure, and consumables.
