Market Outlook for 06 June 2024

Ruchit Jain Ruchit Jain

Last Updated: 6th June 2024 - 10:10 am

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Our markets rallied higher in Wednesday’s sessions as the uncertainty over the elections results reduced and hence the market participants cheered on the news of probability of the existing government continuing with another term. Nifty recovered more than half of the previous day’s losses and ended above 22600 with gains of over 700 points while the Bank Nifty rallied by more than 2000 points.

In last three trading sessions, markets have shown huge intraday movements with traders’ psychology changing fast on the political news flows. However, the event which led to such volatility is finally behind and thus, markets seem to have factored in the outcome of the event now. The focus now would shift back to the broader trend, but there could be some stock specific rotation within this uptrend, where some of the sectors which had seen a sharp rally previous might see some consolidation. As of now, the RSI on the daily chart is yet to give a positive crossover and thus this should be read as a pullback move. The hourly readings are positive and thus traders can trade with a positive bias with proper risk management. FIIs had formed significant short positions on the result day where their ‘Long Short Ratio’ once again around 13 percent. We have seen in the past as well that such huge short positions when covered, it leads to a positive move in the market. As the event is over and markets have factored in the same, these positions could be gradually covered going ahead.

Due to the sharp moves, the range has widened for the index where support for Nifty is placed around 22000-21800 while resistance is seen around 23000-23200.  

                                   Buying interest resumes as uncertainty of event behind

nifty-chart

 

Nifty, Bank Nifty Levels and  FINNIFTY Levels:

  NIFTY Levels SENSEX Levels BANKNIFTY Levels FINNIFTY Levels
Support 1 22360 73600 48300 21380
Support 2 22050 73000 48000 21000
Resistance 1 22930 75000 49700 21900
Resistance 2 23200 75300 50130 22100
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