Bulls retained their control for the fifth straight session, taking the benchmark indices to new closing highs on June 18. Analysts see the Nifty 50 gradually climbing towards the 23,700-23,800 levels, as long as it holds 23,000 as a crucial support in the coming sessions. Meanwhile, the Bank Nifty is likely to surpass the 51,000 mark, with support at 49,900.
The Nifty 50 rose 92.30 points or 0.4 percent to 23,558, while the Bank Nifty jumped 439 points or 0.88 percent to 50,441 on Tuesday. About 1,297 shares advanced, and 1,054 shares declined on the NSE.
Nifty Outlook and Strategy
Apurva Sheth, Head of Market Perspectives & Research at Samco Securities
The Nifty 50 has managed to break out of the consolidation and closed comfortably above the exit polls day high of 23,338. It also closed at new lifetime highs in all the last four trading sessions, indicating bulls are in control and could push the index further up. With the US markets also on the move, it seems that bulls can remain in control till the end of this monthly expiry.
Key Resistance: 23,800, 24,000
Key Support: 23,500, 23,388, 23,000
Strategy: Traders can execute a Call Ladder Spread Strategy by buying one lot of the 23,500 strike Calls in the monthly expiry and selling one lot each of the 23,900 and 24,000 strike calls. The margin used for this strategy will be around Rs 58,659. Maximum profit will be Rs 5,499 if the index expires between 23,900 and 24,000. This strategy will lose money if the index expires outside of the 23,681-24,219 range.
Stop-Loss: If the loss on the total position exceeds Rs 5,499, then you can exit this trade.
A Bull Call spread involves buying an at-the-money strike Call and selling an out-of-the-money strike Call.
Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors
It is best to stay on the long side as of now unless we see a close below the prior day’s low. We can see sector rotation over the short term with different stocks pushing Nifty 50 higher. Over the short term, the immediate support is now at 23,420 and we can expect a move to the 23,650 – 23,700 levels.
Key Resistance: 23,700
Key Support: 23,420
Strategy: Long positions can be created above 23,580 with 23,490 as the stop-loss and a target of 23,700 levels.
Stop-Loss: 23,490
Riyank Arora, Technical Analyst at Mehta Equities
With the benchmark trading well above 23,500, it is now expected that this level should act as immediate support. On the upside, resistances are placed near the 23,600 and 23,700 levels, above which the next resistance would be near the 23,750 level. On the other hand, 23,500 would be minor support, and 23,300 should be the most important support for the June series expiry.
Key Resistance: 23,600, 23,750
Key Support: 23,500, 23,300
Strategy: Buy Nifty near the 23,450 - 23,500 zone with a strict stop-loss at 23,300 for potential targets of 23,750 and 24,000.
Stop-Loss: 23,300
Bank Nifty - Outlook and Positioning
Apurva Sheth, Head of Market Perspectives & Research at Samco Securities
Bank Nifty witnessed a sharp fall from a high of 51,133 to a low of 46,077 during exit polls and election results day. Unlike Nifty, it has yet to recover the loss completely. But it managed to cross the resistance of 50,050, which is the 78.6 percent retracement level of this fall. On Tuesday, the index even outperformed Nifty and ended near 50,500, which is a psychological mark. With most of the heavyweights yet to contribute meaningfully to the recovery, we can expect some major moves if that contribution materializes.
Key Resistance: 50,500, 51,133, 52,000
Key Support: 50,000, 49,000
Strategy: Traders can go long at current levels in Bank Nifty futures for a target of 52,000.
Stop-Loss: 50,000
Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors
Bank Nifty gave a triangle pattern breakout on Tuesday and outperformed Nifty. The overall tone remains buy on dips as long as the support near 49,900 is protected. On the upside, the immediate hurdle is at 51,130, which is the previous lifetime high level.
Key Resistance: 51,130
Key Support: 49,900
Strategy: Long positions can be created on a break above 50,560 with 50,150 as the stop-loss and a target of 51,130 levels.
Stop-Loss: 50,150
Riyank Arora, Technical Analyst at Mehta Equities
The Bank Nifty crossed its important resistance mark of 50,250 on its hourly time frame charts and successfully managed to close above this level. With the next overhead resistance being near 51,150, it is expected that there is a good runway for most banking stocks in the upcoming few weeks.
A minor support is now placed around the 49,900 level, below which the next major support is at 49,500. This level should serve as a strict stop-loss for all active long positions. Any pullback towards the 49,900 - 50,000 zone should offer a good buying opportunity on Bank Nifty.
Key Resistance: 51,000, 51,150
Key Support: 49,900, 49,500
Strategy: Buy Bank Nifty near the 49,900 - 50,000 zone with a strict stop-loss at 49,500 for potential targets of 51,000 and 51,150.
Stop-Loss: 49,500
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