NIFTY OUTLOOK & OPTION TRADING TIPS FOR 26 JUN 2024

Overview

The market experienced a bullish phase driven by investor confidence in the banking and select frontline IT stocks, which propelled benchmark indices to fresh highs. Despite a majority of sectors closing in the red, the significant gains in the financial sector highlighted a positive trend.

Market Performance

• Nifty 50:

  • Closed at: 23,754.15 (+183 points)
  • Trend: Positive with sustainable upside recovery.
  • Immediate support: 23,550
  • Immediate resistance: 23,835 - 24,000

• Sensex:

  • Closed at: 78,164 (+712 points)
  • Sector Rotation: Led by banking, with profit booking in realty, power, metals, and midcaps.

Sectoral Performance

• Banking and Financials: Outperformed with over 1% rally.

  • Nifty Bank Index:
    • New high: Broke above 52,000 resistance.
    • Trading: Strong uptrend with higher highs and higher lows.
    • Immediate targets: 53,000/53,500
    • Support: 52,000

• IT Sector: Showed robust performance, contributing significantly to the bullish trend.

• Realty Sector: Declined by nearly 2%, indicating profit booking.

• Other Sectors:

  • Metals, energy, and broader indices ended flat to marginally lower, reflecting moderate consolidation.

Technical Analysis

• Nifty 50:
  • Formed a long bull candle on the daily chart, indicating a potential upside breakout.
  • Intraday range: Held positive momentum after a strong opening.
  • Higher bottom formation on intraday charts suggests a continuation of the uptrend wave.
• Bank Nifty Index:
  • Breaking resistance of 52,000 with significant call-side open interest build-up.
  • In strong uptrend with support at 52,000.
  • Intraday dips are seen as buying opportunities for targets of 53,000/53,500.

Trend Analysis

• The short-term trend for Nifty remains positive, with early signs of an upside breakout.
• Key Levels:
  • Trend decider level for traders: 23,600/77,500.
  • Immediate resistance zones: 23,835-24,000/78,500-78,700.
  • Below 23,600/77,500, the uptrend would be vulnerable, advising traders to exit long positions.

Market Sentiment

The market's upward movement is influenced by expectations from the upcoming budget and the progress of the monsoon, which could impact the consumption outlook.

Conclusion

The bullish trend driven by the banking sector, particularly private banks, and the performance of frontline IT stocks suggest a positive market outlook in the short term. However, sector rotations and profit booking in specific areas like realty and metals indicate a cautious approach for investors. Key levels and trend decider points should be monitored closely for making informed trading decisions.

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