NIFTY OUTLOOK & OPTION TRADING TIPS FOR 25 JUN 2024

Overview

Indian benchmark indices experienced a marginal increase in a volatile trading session on June 24. Both the Sensex and Nifty showed resilience by recovering from early losses to close in positive territory. The Sensex closed at 77,341, up 0.17% or 131 points, while the Nifty ended at 23,537, up 0.16% or 36 points.

Market Performance

• Sensex: Up 0.17% (131 points) to 77,341
• Nifty: Up 0.16% (36 points) to 23,537
• Advance/Decline: 1,796 shares advanced, 1,692 shares declined, and 134 shares remained unchanged.

Trading Dynamics

The trading session saw significant fluctuations, with both indices initially falling by up to 0.5% before recovering. The Nifty opened gap down but managed to recover, closing with a gain of approximately 37 points. The index has been trading in the range of 23,200 to 23,700 over the past ten sessions, suggesting a consolidation phase.

Technical Analysis

• Nifty: The index has been trading between 23,200 and 23,700. Dips towards 23,200 are seen as buying opportunities with a trailing stop loss set at 23,200. A positive crossover in the hourly momentum indicator suggests a buy signal. Immediate resistance is seen at 23,600, with potential for further upside if this level is breached.
• Bank Nifty: Consolidating after a rally of approximately 1,700 points. Buying is recommended on dips towards 51,350 – 51,300, with immediate resistance at 52,500. A breakout above this resistance could see the index move towards 52,400 – 52,800.

Sectoral Performance

• Gainers: Auto, FMCG, Capital Goods, Telecom, and Power indices rose by 0.5% to 1%.
• Losers: Metal, Oil & Gas, PSU Bank, and Media sectors fell by 0.5% to 1%.

Top Performers

• Nifty Gainers: M&M, Shriram Finance, Power Grid Corporation, Sun Pharma, Grasim Industries.
• Nifty Losers: Cipla, IndusInd Bank, Adani Ports, Coal India, Tata Steel.

Broader Market

• BSE Midcap: Increased by 0.3%.
• BSE Smallcap: Increased by 0.3%.
• Midcaps outperformed the frontline indices, whereas small caps ended in the red.

Market Sentiment

Despite a consolidative trend, sectoral rotation is evident, particularly in FMCG and consumer durables sectors, driven by budget expectations. Improved tax collection and dividends from the RBI are likely to support rural spending and tax benefits. Investors remain optimistic about growth in sectors like capital goods, infrastructure, and auto, despite valuation concerns in mid- and small-cap stocks.

Conclusion

The Indian stock market showed resilience in a choppy session, with both the Sensex and Nifty managing to close marginally higher. The market remains in a consolidation phase with defined support and resistance levels. Investors are advised to adopt a buy-on-dips strategy, particularly in sectors showing strength and positive momentum indicators.