NIFTY OUTLOOK FOR FRIDAY 28-06-2024

Key Highlights:

• Nifty closed at a record high, crossing the 24000 mark for the first time, ending at 24044, up 175 points.
• Sensex rose by 568 points (0.72%) to close at 79243.
• Market Breadth: 1128 shares advanced, 2240 shares declined, and 93 shares remained unchanged.

Market Movement:

• Opening: Nifty opened flat and gained momentum throughout the day.
• Daily Chart: Nifty has shown a perpendicular rally over the last four sessions, gaining around 700 points.
• IT Index: A major contributor to the Nifty’s performance, helping it close above 24,000.

Technical Analysis:

• Immediate Resistance: Nifty faces resistance at 24,150 – 24,200.
• Support: Strong support is at 23,800.
• Market Breadth: Deteriorating over the last three sessions, indicating caution.
• Hourly Chart Divergence: Visible divergence suggesting caution for traders.
• Trailing Stoploss: Should be set at 23,800 for long positions.

Sector Performance:

• Top Gainers: UltraTech Cement, Grasim Industries, LTIMindtree, Wipro, NTPC.
• Top Losers: Shriram Finance, L&T, Eicher Motors, Bajaj Auto, Divis Lab.
• Sector Indices:
  • IT and Power indices rose by 1.7% each.
  • PSU Bank index declined by 1%.
• Midcap and Smallcap:
  • BSE Midcap index ended flat.
  • Smallcap index shed 0.5%.

Bank Nifty Analysis:

• Resistance: Faced resistance around the 53,200 mark.
• Close: Ended in red after a ~2000 points rally over the last four sessions.
• Hourly Chart: Negative crossover indicating high probability of consolidation.
• Support and Resistance:
  • Immediate support at 52,700.
  • Resistance at 53,100.
  • Needs to sustain above 53,000 for further upward movement towards 53,400/53,700.
• Overbought Territory: Likely correction towards 52,500/52,000 if it fails to sustain above 53,000.

Market Sentiment:

• Mid and Smallcaps: Underperformed relative to the Frontline Index.
• Bullish Momentum: Nifty formed its 4th consecutive strong bullish candle on the daily chart, indicating a potential overstretched upmove.
• Trading Strategy: Buying on dips recommended. Stock-specific and nimble trading advised.
• IT Stocks: Expected to lead, with Bajaj twins also showing promise.
• IT Index: Breaking out ahead of earnings season.

Conclusion:

The Indian benchmark indices achieved record highs with Nifty crossing 24,000 for the first time, led by IT and Power sectors. Despite the strong performance, caution is advised due to deteriorating market breadth and visible divergences. Traders are recommended to stay stock-specific and be prepared for potential consolidation, especially in the Bank Nifty.

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