Nifty 50 and Bank Nifty at Risk of Falling Below May Low Due to Ongoing Market Sell-Off
Market Update: Nifty 50 and Bank Nifty Face Bearish Trend
The Indian stock market has been facing a bearish trend in recent days, with the Nifty 50 and Bank Nifty plummeting to new lows. Despite a healthy pullback in the last two trading sessions, analysts expect the market to continue its downward trajectory.
Nifty 50 Outlook
The Nifty 50 has been trading below its key moving averages, with short and medium-term moving averages trending down. This has led to a weakening momentum indicator, indicating a bearish trend. The index has broken a critical support level last week and has started the week on a negative note. Analysts expect the short-term trend to remain negative, with a possibility of breaking the previous swing low of 23,262. On the upside, the 24,000 levels will act as a critical swing resistance.
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| Nifty 50 Levels | Resistance | Support |
|---|---|---|
| June 1, 2023 | 23,383 | 23,000 |
| Key Resistance | 23,700, 23,850 | 23,250, 23,000 |
According to Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities, the short-term range for the Nifty 50 is 23,000 to 24,000, with a high possibility of testing the lower end of the range.
Strategy for Nifty 50
- Sell Nifty Futures on rise near 23,550 with a stop-loss above 23,750, targeting 23,200 and 23,000.
- Buy Nifty Futures on the pullback near 23,400, with a stop-loss of 23,200, targeting 23,800.
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Bank Nifty Outlook
The Bank Nifty has been trending lower, forming lower highs and lower lows. Analysts expect the index to break the 53,000 levels on an immediate basis, with the next support pegged at 52,000. The index has broken the 54,000 levels and has closed below the same, which is bearish in the near term.
| Bank Nifty Levels | Resistance | Support |
|---|---|---|
| June 1, 2023 | 53,643 | 52,800 |
| Key Resistance | 54,500, 55,500 | 53,000, 52,000 |
According to Jay Thakkar, the Index has broken the 55,000 levels and below that the next support is pegged at 53,000 on an immediate basis.
Strategy for Bank Nifty
- Sell Bank Nifty Futures on rise near 54,250, with a stop-loss above 55,500, targeting 53,000.
- Buy Bank Nifty Futures in the zone of 53,900-53,700, with a stop-loss of 53,400, targeting 55,400.
Investor Takeaway
Investors should be cautious and consider hedging their portfolios as the market is at risk of falling below its May low.
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