June 3, 2024 / 8:41 AM
Nifty’s immediate resistance is between 23,000-23,100: Santosh Meena, head of research, Swastika Investmart
Last week, tensions were high ahead of this highly anticipated event, with NIFTY and Sensex falling by around 2% on aggressive selling by FIIs. Notably, in the F&O market, short positions in index futures hit a multi-year high of 320,000 contracts. IT stocks were the biggest drag, with the NIFTY IT index falling by around 4.25%.
All eyes are now on the most significant event in the last five years – the outcome of the Indian Lok Sabha elections scheduled for Tuesday. Ahead of that, market participants will react to the exit polls on Monday. While most market participants believe that the NDA coalition will secure a majority, foreign investors and many high net worth traders remain on the sidelines ahead of this pivotal event. As a result, the market is approaching the event cautiously and a positive surprise in the exit polls could translate into upside as the majority of exit polls have the NDA winning more than 350 seats. Conversely, if the actual outcome is a negative surprise, it could trigger a knee-jerk reaction in the market.
Following the election results, the next big catalyst will be the Reserve Bank of India’s credit policy announcement scheduled for June 7. A key point to watch will be foreign investor behavior post the election results. Globally, macroeconomic data from the US and China will also play a key role in shaping market sentiment.
On the technical chart, Nifty corrected from the trendline resistance at 23,100 but managed to hold the support zones of the 50-DMA and 20-DMA cluster. The immediate resistance zone is between 23,000 and 23,100, followed by target levels at 23,300, 23,500 and 24,000. Conversely, if Nifty breaks below the 22,400 level, the next support levels to watch are 22,200, 22,000 and 21,700.
Similarly, Bank Nifty held its 20-day moving average after a pullback from the 49,500-50,000 supply zone. A break above 50,000 could trigger a rally towards 51,000 and 52,000 levels. On the downside, a break below the 48,000 level could see the next support levels at 47,000 and 46,200.
