Market Outlook for June 2: Key Events and Trends to Watch

Market Sees Relentless Selling Pressure on June 1, Extending Losses for Fourth Straight Day

The Indian market saw a weak start to the week on June 1, with the Nifty 50 index falling seven-tenths of a percent, marking a fourth consecutive day of losses. This decline has left the index below the 50 percent Fibonacci retracement of the April rally and all key moving averages, with momentum indicators weakening.

The Nifty 50 closed at 23,383, a level that experts say is crucial to watch. A break below this level could open the door to the next downside target of 23,100. On the upside, however, 23,550 and 23,700 could act as resistance levels.

Key Levels for Nifty 50 and Bank Nifty

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The Nifty 50 formed a long bearish candle on the daily timeframe for another session, registering an upper shadow for the fourth straight session. This indicates weakness and selling pressure at higher levels. The short- and medium-term moving averages trended downward, while the RSI fell to 40.27 with a bearish crossover. The MACD also showed a negative crossover, with a red bar appearing in the histogram after four green bars.

Options Data

The maximum Call open interest for the Nifty 50 was seen at the 24,000 strike (1.73 crore contracts), which can act as a key resistance level. The maximum Call writing was observed at the 23,600 strike (83.19 lakh contracts), followed by the 23,500 and 23,550 strikes.

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On the Put side, the 23,000 strike holds the maximum Put open interest (98.06 lakh contracts), which can act as a key support level. The maximum Put writing was placed at the 23,400 strike (33.34 lakh contracts), followed by the 23,250 and 23,350 strikes.

Funds Flow and Put-Call Ratio

The Nifty Put-Call ratio (PCR) declined to 0.69 on June 1, from 0.74 compared to the previous session. This indicates a bearish mood in the market.

India VIX and Other Market Indicators

India VIX, the fear gauge, extended its uptrend for another session, rising 2.21 percent to 16.54. A sharp spike above 17 could heighten risks for bulls.

A long build-up was seen in 14 stocks, indicating a build-up of long positions. 73 stocks saw a decline in open interest along with a fall in price, indicating long unwinding. 114 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.

Stocks Under F&O Ban

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit. Amber Enterprises India and Kaynes Technology India were added to the F&O ban list.