The trends on Gift Nifty also indicate a positive start for the Indian benchmark index. The Gift Nifty was trading around 22,670 level, a premium of nearly 90 points from the Nifty futures’ previous close.
On Wednesday, the domestic equity indices staged a remarkable recovery, gaining over 3% each, with the Nifty 50 closing above 22,600 level.
The Sensex surged 2,303.19 points, or 3.20%, to close at 74,382.24, while the Nifty 50 settled 735.85 points, or 3.36%, higher at 22,620.35.
Nifty 50 formed a long bull candle on the daily chart with lower shadow on Wednesday, beside the long bear candle of Tuesday.
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“Technically, this pattern indicates bullish inside day type pattern formation. This market action signals a counter attack of bulls after one day of weakness in the market. This is a positive indication. Nifty moved above the crucial hurdle of mid part of Tuesday’s long range bear candle around 22,250 on Wednesday and closed higher,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
As per this theory, the next crucial hurdles to be watched are around the upper part of that candle around 23,200 levels, he added.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Table of Contents
Nifty OI Data
According to the options data, the highest open interest (OI) on the call side is at the 22,800 strike price, followed by the 23,000 strike price. On the put side, the highest OI is at the 22,200 strike price, said Mandar Bhojane, Research Analyst at Choice Broking.
Rahul Ghose, CEO of Hedged.in noted that the increased put writing at 22,600 levels and below indicates good support and the increased writing of the call OI at 22,700 and above strikes, the highest call OI at 23,000 levels shows Nifty has limited upside for this weekly expiry.
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“However, on any weakness when we test the max pain at 22450 on the weekly expiry tomorrow, this should be a good level to build long positions for next week. The PCR has gone up from the 0.52 to 0.64 levels, which is still showing that markets are oversold,” said Ghose.
Nifty 50 Prediction
The Nifty 50 index recovered strongly on June 5 and closed the day convincingly higher by 735 points.
“Nifty has shown a sharp recovery, rebounding to touch its 100-day moving average placed at 21,786 and closing above its 21-day EMA (Exponential Moving Average). For a bullish or bearish outlook, it’s crucial to monitor key levels. If Nifty sustains above its 21-day EMA or 22,500, a buy-on-dip approach is advisable,” said Rupak De, Senior Technical Analyst, LKP Securities.
V.L.A. Ambala, Co-founder – Stock Market Today (SMT) noted that the Nifty 50 index formed a ‘Bullish Harami Candlestick’ pattern at the daily timeframe, indicating a possible trend reversal. She believes Nifty could trade within a 3-5% range this week.
According to Ambala, the Nifty is expected to find key support between 22,500 and 22,350 in the next session, whereas it may face resistance between 22,850 and 23,000 levels.
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Bank Nifty Prediction
The Bank Nifty index rallied 2,126 points, or 4.53% to close at 49,054 level.
“The Bank Nifty index saw a sharp recovery from its 200-day moving average, closing above its rising trendline and 21-day EMA. This suggests a buy-on-dip strategy with a stop-loss at 47,500. The immediate support level is 47,800, while resistance is at 49,500,” De said.
Meanwhile, Ghose noted that the Bank Nifty rallied to test the max pain at 48,900, and the increased writing of the both puts and the calls at 49,000 levels indicates Bank Nifty shall trade in range-bound for next week.
“However, any weakness shall be bought & the rallies shall be sold. The PCR jumped from 0.41 to 0.95 which still indicates that Bank Nifty has upside potential,” Ghose said.
According to Ambala, the Bank Nifty could gain support between 48,340 and 48,200 levels, and witness resistance around 49,200, 49,500 and 49,850.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 06 Jun 2024, 07:27 AM IST
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