NIFTY BANKNIFTY OUTLOOK FOR TOMORROW 22 MAY 2024

Overview

On May 21, 2024, the Indian stock market exhibited a volatile trading session, closing on a mixed note with benchmark indices ending flat. The Sensex declined by 52.63 points (0.07%) to close at 73,953.31, while the Nifty 50 gained 27 points (0.12%), finishing at 22,529.05.

Key Market Movements

• Nifty 50 Performance: The Nifty 50 opened negatively but recovered to close in the green. The index traded within a range of 22,400 to 22,600, with strong put writing at 22,400 and 22,500 levels providing support.
• Sensex Performance: The Sensex experienced a slight dip, ending 52.63 points lower.

Technical Analysis

• Nifty 50:

  • The index reached the 22,570-22,600 resistance zone, which corresponds to the 78.6% Fibonacci retracement level.
  • A bullish engulfing candle on the daily chart suggests buyer interest at lower levels.
  • A decisive move above 22,600 could trigger a rally towards 22,800. However, consolidation is expected within the 22,400 to 22,600 range due to the negative crossover in the hourly momentum indicator.
  • Long positions should maintain a stoploss at 22,400.

• Bank Nifty:

  • The index consolidated in a narrow range, closing 151.30 points down at 48,048.20.
  • Support is identified at 48,000, while resistance at 48,400 aligns with the 20DMA.
  • A breakout above 48,400 could lead to further gains towards 48,700.
  • The hourly momentum indicator suggests sideways movement but no trend reversal; a trailing stoploss should be set at 47,400.

Sector Performance

• Top Performing Sectors:
  • Nifty Metal: Gained 3.88%, with Hindalco being the biggest gainer (up 5.04%).
  • Energy and PSU Banking: Showed significant strength, contributing to the recovery of the Nifty 50.
• Lagging Sectors:
  • Nifty FMCG: Declined by 0.45%, with Nestle being the biggest loser (down 1.74%).

Broader Market

• Midcaps and Smallcaps:
  • The BSE Midcap Index rose by 0.4%, slightly outperforming the broader market.
  • The BSE Smallcap Index fell by 0.2%, indicating mixed activity in the broader market.

Currency Market

• Indian Rupee:
  • The rupee traded positively, closing at 83.31 against the US dollar, supported by stability expectations from the current government and active buying by Domestic Institutional Investors (DIIs). The trading range is expected to be between 83.00 and 83.50 in the upcoming sessions.

Conclusion

The market's flat closing in a volatile session indicates cautious investor sentiment. While the metal and energy sectors provided significant support, FMCG lagged behind. Technical indicators suggest potential consolidation for the Nifty 50 and Bank Nifty in the short term, with key support and resistance levels guiding future movements. Investors are advised to maintain cautious long positions with appropriate stoplosses.