NIFY OUTLOOK & OPTION CALL PUT TIPS FOR 25 JUNE 2020

Bears griped the market is the last hour of trades on Wednesday & closed the day below 10500 mark. Traders turned cautious in domestic market amid weakness in Asian indices including Nikkie, Hong Kong and Nifty. Sensex closed 561 points lower at 34868 and Nifty fell 165 points lower to 10305. Earlier at opening bell, Sensex rose 250 points higher at 35679 and Nifty climbed 58 points higher at 10529.  With immediate effect from date of President's nod on the ordinance, cooperative banks will come under the RBI supervision now. As a result, Nifty Bank slips 900 points; down over 4% .India's economy is likely to shrink by 5.3% this fiscal, the lowest GDP growth in the Indian history and the sixth instance of economic contraction. The disorder caused by the COVID-19 pandemic unfolded with such a speed and scale that the disruption in production, breakdown of supply chains/trade channels and total wash out of activities in aviation (some activities have started now), tourism, hotels and hospitality sectors will not allow the economic activity to return to normalcy throughout FY21. As a result, besides contracting for the whole year, GDP will contract in each quarter in FY21 (April 2020 to March 2021). However, the GDP growth would bounce back in the range of 5-6% in FY22 (April 2021 to March 2022), aided by base effect and return of gradual normalcy in the domestic as well as global economy. India's gross domestic product (GDP) will contract 5.3% in FY21. This will be the lowest GDP growth in the Indian history (Indian GDP data is available from FY51) and sixth instance of economic contraction, others being in FY58, FY66, FY67, FY73 and FY80; the previous low was negative 5.2% in FY80.
The Nifty closed the day 10305 and formed a bearish candle on daily chart, as the closing was lower than the opening value. Considering the consistent weakness after the recent rally, we advise you to avoid long positions. The Nifty was decisively trading below its 50-day moving average and if it slips into some sort of multi-days downtrend, then corrective swing would get extended into the 10250–10200 zone. For the time being, strength in the index shall not be expected unless it closes above 10500 levels. Traders should avoid long positions and look for some signs of stability around 10250 whereas existing shorts should be squared off if the Nifty fails to close below 10400 in the next trading session.

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Resistance: 10377, 10443, 10493

Support: 10261, 10211, 10145