Indian equity market benchmark indices Sensex and Nifty 50 are likely to open flat on Tuesday amid mixed global developments.
The movement of GIFT Nifty also indicates that India’s benchmark index has made a flat to positive start. GIFT Nifty is trading around 23,020 levels, up nearly 20 points from the previous close of Nifty futures.
Domestic stock indexes ended flat on Monday after hitting fresh record highs.
The Sensex index fell 19.89 points to close at 75,390.50, while the Nifty 50 index fell 24.65 points or 0.11 percent to close at 22,932.45.
The Nifty 50 formed a bearish candlestick pattern at its all-time high level on the daily chart, suggesting profit booking.
“Yesterday’s negative close appears to be just a breather after the recent sharp rally. Nifty continues to remain above the 20-day and 50-day SMAs. The 14-day RSI is rising at 66.63 and is not overbought, which is encouraging. We expect further gains and new record highs in the coming sessions pending the election results, but remain wary of volatile movements in the near term,” said Subhash Gangadharan, Senior Technical and Derivatives Analyst, HDFC Securities.
According to him, the key support to watch out for further weakness is 22,908 to 22,871.
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Here’s what to expect from Nifty 50 and Bank Nifty today.
Nifty OI Data
An analysis of Nifty put options reveals that open interest (OI) is concentrated at 22,700 levels, suggesting potential support at this level. On the call side, a huge concentration of OI is seen at 23,200 and 23,500 levels, said Mandar Bhojane, research analyst at Choice Broking.
Rahul Ghose, CEO, Hedged.in, noted that the rise in call open interest (OI) above 23,100 indicates limited upside potential and the PCR tested 1.09 in the mid-session but failed to sustain above 1.09 levels, dropping to 0.88 in the last hour of the trading session. He said the rise in VIX was the main reason for the fall in the Nifty 50 index and the PCR.
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Nifty 50 Prediction
After hitting a record high intraday, the Nifty 50 index ended almost flat in volatile trade on May 27. The index fell 0.11 per cent or 24.7 points to close at 22,932.45.
“Nifty remained mostly volatile during the day as India awaits the final stages of the general elections. The short-term outlook remains positive and the index is holding above key moving averages. Support is at 22,900, below which the index can fall to 22,800. On the upper end, bears are active around 23,000-23,050,” said Rupak De, senior technical analyst at LKP Securities.
A decisive move above 23,050 could trigger a stronger upside towards higher levels, he said.
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VLA Ambala, co-founder of Stock Market Today (SMT), believes that although the market is showing a bullish trend, it is currently overvalued, hence, we can expect to see a correction in the near future.
“Such a change in price movement would present a lucrative opportunity for traders. Traders with a short-term outlook should consider holding their positions and looking for quality stocks to take advantage of any potential dips. Similarly, traders with a long- to medium-term investment outlook should consider taking profits,” Ambala said.
She believes that Nifty may find support around 22,920, 22,845 and 22,790 points and face resistance between 22,970 and 23,050 points.
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Bank Nifty Forecast
The Bank Nifty index rose 310 points to close at 49,281 on Monday and formed a bullish candlestick pattern with long upper wick on the daily chart.
“Bank Nifty opened above the resistance level of 49,000 but encountered selling pressure in the range of 49,600-49,800, with 49,600 becoming the new resistance level. Large number of put sales at strike price of 49,000 indicates strong support at this level. A close above 49,600 could take Bank Nifty towards 50,000,” De said.
He added that the overall sentiment is bullish and recommended a buy-low strategy with a stop loss at 48,900.
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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