Key Market Developments for June 8: A Pre-Opening Guide

Nifty 50 Slips 0.2 Percent Amid RBI Monetary Policy Announcement

The Nifty 50 index concluded a range-bound session with a moderate loss of 0.2 percent on June 5, following the Reserve Bank of India's (RBI) monetary policy announcement. Despite the index sustaining below all key moving averages and forming a lower high-lower low pattern, the underlying technical setup presents a somewhat mixed picture.

The 23,100-23,000 zone, which serves as the 61.8 percent Fibonacci retracement of the April rally and a psychological support level, is expected to be a crucial support area for the index. A fall below and sustained trading under this zone could open the door for a decline toward 22,700. On the upside, 23,500 is likely to act as the immediate hurdle, followed by 23,700 as the next crucial resistance level, according to experts.

Nifty 50 Key Levels and Technical Indicators

Read also: Stocks to Watch: Creative Newtech, HG Infra, Merritronix, EMS, Alembic Pharma, Adani Enterprises, Adani Energy Draw Investor Attention on June 8

The Nifty 50 formed a bearish candle with minor upper and lower shadows on the daily charts, indicating pressure amid volatility. The index remained below all key moving averages, with both short- and medium-term moving averages trending downward. It also failed to defend the 23,400 level on Friday after holding above it during the previous three sessions. The Relative Strength Index (RSI) remained flat at 40.64, while the Moving Average Convergence Divergence (MACD) stayed below both the signal line and the zero line, with further expansion in the red histogram bars. All these factors indicate a weak-to-negative bias in the near term.

Bank Nifty Extends Gains, But Faces Resistance

The Bank Nifty index extended its gains for the fourth consecutive session, rising 0.35 percent and forming a small-bodied bullish candle with upper and lower shadows on the daily timeframe, indicating indecision between bulls and bears. The index closed above the 20-day Exponential Moving Average (EMA) and the 38.2 percent Fibonacci retracement level of the correction from the February high to the April low. However, it needs to sustain above these levels for the rally to continue. A decisive fall below them could drag the index toward 53,700, followed by 52,700. On the upside, 55,000 remains a crucial resistance level to watch. The RSI rose to 50 and generated a positive crossover, while the MACD remained above the signal line with further expansion in the green histogram bars. All these factors indicate improving momentum and a positive undertone.

Read also: Reliance Shareholders Overwhelmingly Approve Anant Ambani's Appointment as Whole-Time Executive Director

Nifty Call and Put Options Data

Funds Flow and Put-Call Ratio

The Nifty Put-Call ratio (PCR) fell to 0.83 on June 5, from 1.00 compared to the previous session. The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.

India VIX and Volatility

India VIX, which measures expected market volatility, declined 0.61 percent to 15.78 and remained below all key moving averages (except the 200-day DEMA), which is a somewhat supportive factor for the market. However, it needs to fall below and sustain under the 15 level to provide greater comfort to bulls.

F&O Segment and Stocks Under Ban

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit. Stocks added to F&O ban: Nil. Stocks retained in F&O ban: Amber Enterprises India, Kaynes Technology India. Stocks removed from F&O ban: Nil.