The Indian stock market is poised for a robust opening on Monday, with the Nifty 50 expected to reach new highs. This optimistic outlook follows favorable exit polls from the Lok Sabha elections, strong GDP growth figures, and positive global market trends.
Indicators from the Gift Nifty suggest a promising start for the Indian benchmark index, with the Gift Nifty trading around the 23,370 mark. This represents a premium of nearly 660 points over the previous close of Nifty futures.
Last Friday, domestic equity indices ended their five-day losing streak with minor gains. The Sensex rose by 75.71 points to finish at 73,961.31, while the Nifty 50 increased by 42.05 points, or 0.19%, closing at 22,530.70. Notably, the Nifty 50 formed a long-legged doji on the daily chart, signaling a potential reversal.
Subash Gangadharan, Senior Technical/Derivative Analyst at HDFC Securities, observed, “The Nifty's rebound from close to the 50-day SMA opens the door for a further bounce in the coming sessions. To maintain this upward momentum, Nifty needs to clear immediate resistances at 22,654 - 22,706. Key support levels to watch for any weakness are 22,465 - 22,396.” Gangadharan anticipates market volatility as we approach the election result announcement.
Nifty 50 Outlook
On May 31, the Nifty 50 experienced volatility within a narrow range, ending 42 points higher at 22,530. According to Rupak De, Senior Technical Analyst at LKP Securities, “Significant call writing at 23,000 and put writing at 22,500 suggest that Nifty may fluctuate between these levels in the near term. A drop below 22,500 could trigger a correction toward 22,000.”
Technically, Nifty corrected from the trendline resistance at 23,100 but held support at the 50-DMA and 20-DMA clusters. Santosh Meena, Head of Research at Swastika Investmart Ltd, identified immediate resistance between 23,000 and 23,100, with targets at 23,300, 23,500, and 24,000. “If Nifty falls below 22,400, support levels to watch are 22,200, 22,000, and 21,700,” Meena added.
Bank Nifty Outlook
The Bank Nifty surged 301 points to close at 48,984 on Friday, respecting its 20-DMA. Rupak De noted, “Bank Nifty's sharp recovery from its 21-day EMA brought it close to the resistance level of 49,000. The RSI is making higher lows, moving towards a bullish crossover. A buy-on-dips strategy is recommended with a stop loss at the 21-day EMA, set at 48,500. Hence, 48,500 is strong support, and 49,200 is the first resistance.”
De further stated that if Bank Nifty breaks through 49,200 on the daily chart, it could soon reach 50,000.
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