Market Outlook for May 29: Key Developments and Trends to Watch

Nifty 50 Consolidates Amid Uncertainty Over US-Iran Peace Deal

The Nifty 50 index continued its consolidation trend on May 27, closing flat with a negative bias and marking a muted start to the June series. Despite the India VIX falling below the 15 level, the index faced significant pressure at higher levels and sustained below the 50-day EMA (24,000) on a closing basis.

Key Levels for Nifty 50

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The immediate trading range for the index is seen at 23,800-24,000. A convincing breakout on the higher side can open the door for the 24,100-24,300 zone. However, a break below the lower range can drag the index toward 23,700-23,600, according to experts.

Technical Analysis

The Nifty 50 formed a small-bodied bullish candle with a noticeable upper shadow on the daily charts, indicating pressure at higher levels and the presence of a hurdle around the 50-day EMA (24,000). The index still held above the short-term moving averages (10 and 20-day EMA), though both almost flattened out. The RSI at 51.35 turned sideways, though it remained above the reference line. The MACD maintained an uptrend with a bullish crossover and a consistently rising green histogram bar. All this indicates continued consolidation with a cautious positive bias.

Bank Nifty Analysis

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The Bank Nifty fell 0.43 percent and formed a bearish candle with an upper wick on the daily timeframe. Similar to the Nifty, it sustained below the 50-day EMA on a closing basis for another session. The price action indicated that the banking index faced resistance at the 50 DEMA (55,250) but still held above the 20-day EMA, which is closer to the 38.2 percent Fibonacci retracement of the April rally and appears to be gradually flattening out.

Options Data

• Maximum Call open interest was seen at the 24,000 strike (86.5 lakh contracts)
• Maximum Put open interest was seen at the 23,900 strike (57.9 lakh contracts)

Funds Flow and Put-Call Ratio

The Nifty Put-Call ratio (PCR) declined to 1.02 on May 27, from 1.07 compared to the previous session. The increasing PCR indicates a firming up of a bullish sentiment in the market.

India VIX

India VIX, the fear gauge, maintained its downtrend and closed even below its long-term moving averages. It fell 7.13 percent to 14.98 on Wednesday and has lost 25 percent over the last seven sessions, which is generally considered favourable for bulls.

Stocks with High Delivery Trades

The following stocks saw a high share of delivery trades, indicating investing interest:

• List of stocks not provided.

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. No stocks were added or removed from the F&O ban list on May 27.