Indian stock markets are expected to open sharply higher on Monday on the back of exit polls for the Lok Sabha elections, strong Indian GDP growth and positive cues in global markets, with the benchmark Nifty 50 likely to hit a new record high.
The movement in GIFT Nifty also suggests that India’s benchmark index has started to gap up. GIFT Nifty is trading around the 23,370 level, nearly 660 points higher than the previous close of Nifty futures.
Domestic stock indexes closed slightly higher on Friday, halting a five-day losing streak.
The Sensex index rose 75.71 points to close at 73,961.31, while the Nifty 50 index rose 42.05 points or 0.19 percent to close at 22,530.70.
Nifty 50 formed a long-barred cross on the daily chart, breaking a five-day decline.
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“The bounce in Nifty from close to the 50-day SMA has raised the possibility of further bounce in the coming sessions. For the bulls to gain the upper hand, Nifty needs to break above the immediate resistance levels of 22,654-22,706. The key support levels to anticipate resumption of the bear market are 22,465-22,396,” said Subhash Gangadharan, senior technical and derivatives analyst, HDFC Securities.
He believes markets are likely to be more volatile in the coming sessions as the announcement of the election results draws closer.
Here’s what to expect from Nifty 50 and Bank Nifty today.
Nifty 50 Prediction
As investors awaited the election results, the Nifty 50 index continued to fluctuate in a narrow range on May 31, closing at 22,530 levels, up 42 points.
“Call selling is most prevalent at 23,000 while put selling is quite prevalent at 22,500, indicating that Nifty may fluctuate between 22,500 and 23,000 in the coming days. However, a drop below 22,500 could trigger a correction towards 22,000,” said Rupak De, senior technical analyst at LKP Securities.
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On the technical chart, Nifty corrected from the trendline resistance at 23,100 but managed to hold the support zone of the cluster of 50-DMA and 20-DMA.
According to Santosh Meena, head of research at Swastika Investmart, the immediate resistance zone is 23,000-23,100, followed by target levels of 23,300, 23,500 and 24,000.
“Conversely, if Nifty sinks below the 22,400 level, the next support levels to watch are 22,200, 22,000 and 21,700,” Meena said.
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Bank Nifty Forecast
Bank Nifty rose 301 points in line with its 20-day moving average to close at 48,984 on Friday.
“Bank Nifty recovered sharply from the 21-day EMA and closed close to the resistance level of 49,000. The RSI is making new lows and heading towards a bullish crossover. A buy low strategy is advisable with a stop loss at the 21-day EMA at 48,500. Hence, 48,500 is a strong support and 49,200 is the first resistance,” De said.
He further added that if Bank Nifty breaches 49,200 on the daily chart, it could soon reach 50,000.
Disclaimer: The views and recommendations expressed above are those of the individual analysts or brokerage firms and not that of Mint. We recommend checking with a certified professional before making any investment decisions.
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