The immediate support for Nifty 50 is around 22,400, and if the bears hold their ground, it will go to 22,300, which is also the 61.8 percent Fibonacci retracement line.
On May 30, the monthly F&O expiration day, the benchmark Nifty 50 plummeted for the sixth session in a row, losing about a percent. The 50 percent Fibonacci retracement level (from 21,821 to 23,111) and the 20-day SMA were both held, however. These levels often serve as vital supports. Experts predict that if the index rises from here, the 22,700–22,800 zone and the 23,000 level might serve as greater hurdles.
The immediate support is around 22,400, and the next level is 22,300, which is also the 61.8 percent Fibonacci retracement level, if the bears hold their ground. Ahead of the exit polls on June 1 and the Lok Sabha election results on June 4, the volatility remained high, hovering around the 24 mark.
The Nifty 50 had its worst one-day decline since May 9 at 22,489, down 216 points or 0.95 percent. On the daily charts, it created a bearish candlestick pattern with upper and lower shadows. For three days in a row, the index kept creating lower highs and lower lows.
In the meanwhile, the Bank Nifty recovered after a few days of declines, increasing 181 points, or 0.37 percent, to 48,682, and creating a bullish candlestick pattern on the daily timescale with an upper shadow. The index's primary resistance level is probably going to be above 49,000, while the support zone is probably going to be around 48,300.
nifty plan and outlook
Deven Mehata works at Choice Broking as an equity research analyst.
The Nifty has significant support on the downside around 22,385 points, which is also in proximity to its 50-day moving average levels. Further drop towards the next support at 22,150 levels might be anticipated if the index is unable to maintain this level of support. Higher yet, the Nifty faces significant resistance around 22,600, which is also in close proximity to its 20-day moving average levels. The Nifty may rise toward 22,850 levels if it closes over 22,600.
Crucial Opposition: 22,600, 22,850
Major Assistance: 22,385, 22,200
Buying on dips around 22,385 levels with a goal of 22,600 and 22,850 levels is the strategy.
Stop-Loss: 22,200 as of the close
Chandan Taparia, Motilal Oswal Financial Services' Head of Equity Derivatives & Technicals, Broking & Distribution
Currently, weakness may extend to 22,350 and then 22,222 zones until it holds below 22,500 zones, while obstacles are visible at 22,600 and then 22,750 zones.
Options data is dispersed at different strike prices since this is the start of a new series. On a weekly basis, the highest Call open interest (OI) is at 23,000, with the 22,800 strike coming next, while the highest Put OI is at 22,000, with the 22,500 strike coming next. There was small Put writing at 22,400 and 22,200 strikes, and minor Call writing at 22,500 and 22,600 strikes. With an immediate range between 22,100 and 22,800 levels, option data points to a wider trading range between 21,800 and 23,100 zones.
Crucial Opposition: 22,750, 23,000
Main Assistance: 22,222, 22,000
The monthly Bear Put Spread method should be used for Nifty hedging. Purchase one lot of 22,500 strike puts at Rs 470 and sell one lot of 21,000 strike puts at Rs 120 for the June 27 expiration. Each lot has a margin requirement of around Rs 20,000, with a lot size of 25.
350 points was the net premium paid
Maximum Risk: If the Nifty rises, 350 points (or Rs 8,750).
Maximum Bonus: 1,150 Points, or 28,750 rupees If the Nifty falls below the 21,000 mark
Risk: 1 in 3.28 is the reward.
Technical Research Analyst at Bonanza Portfolio, Virat Jagad
The market ended below 22,500, providing the index some support. 22,350 is the next support, and then 22,000 is the following level. In order to resume its upward momentum, the Nifty must continue to trade above 22,750.
A short-term shift in trend was indicated by the Nifty closing below its 21-day EMA. The price action, which points to a short-term downturn, is supported by the Relative Strength Index's (RSI) southward movement.
Crucial Opposition: 22,535, 22,750
Main Assistance: 22,350, 22,000
The plan is to buy one lot of 22,850 strike calls and sell one lot of 22,750 strike calls.
Shrikant Chouhan, Kotak Securities' Head of Equity Research
The market is now trading close to the 20-day SMA after a significant pullback. We think that the market has finished one leg of its decline, and for traders, the trend-determining level would be 22,450, or the 20-day SMA. The index may return to 22,600–22,750 above this. Conversely, a new selloff might only occur if the market closes below 22,450, at which point it may drop as low as 22,350 or 22,325.
Crucial Opposition: 22,600, 22,750
Major Assistance: 22,350, 22,325
Strategy: Due to the possibility of becoming caught at lower levels, short-term traders should use extreme caution and selectivity.
Outlook and Positioning for the Bank Nifty
Deven Mehata works at Choice Broking as an equity research analyst.
Strength was shown by the Bank Nifty's ability to close above 48,500 levels. The index encounters some resistance on the upward side between 49,000 and 49,200 levels.
If the index closes above this resistance region, it may go toward the 50,000 goal, which would represent new all-time high levels.
The big bullish candle and Thursday's close over 48,500 highlight the optimistic attitude in Bank Nifty. Should the index close over 49,000, more buyers may get interested, which would push it closer to the important 50,000 mark.
Principal Opposition: 49,000, 49,200
Major Assistance: 48,300, 48,200
Buying on declines around 48,300 levels with a goal of 49,000 and 49,200 levels is the strategy.
Stop-Loss: 48,200 as of the close
Chandan Taparia, Motilal Oswal Financial Services' Head of Equity Derivatives & Technicals, Broking & Distribution
Daily consolidation has seen Bank Nifty settle into a broader range between 48,250 and 49,500, although it is still maintaining a strong position above its 50 DEMA with some stock-specific volatility. The second stage of the rally towards 51,000-51,500 zones might begin with a decisive hold above 49,250-49,500 zones.
Bank In the last month, Nifty volatility has risen dramatically from levels 15 to 34, increasing by over 133%. We anticipate a cooling down of volatility from upper zones after the election result. We may take advantage of time decay and the volatility cool-off by launching an Iron Butterfly Option Strategy.
After three sessions, it negated the development of lower highs and established a bullish candle on the daily scale. It must now maintain its position above 48,500 zones in order to rebound towards 49,250 and eventually 49,500 zones. If this level is held, there may be some weakening towards the 48,250 and 48,000 levels.
Crucial Opposition: 49,250, 49,750
Major Assistance: 47,777, 48,000
Apply the monthly Iron Butterfly Strategy for the Bank Nifty with an expiration date of June 26. Call for 48,500 strike, and then sell it. Put, purchase 51000 CE and 46000 PE with a June 26 expiration date (monthly).
One lot each of 48,500 strike calls and puts is being sold for Rs 1,550 and Rs 1,050, respectively. Purchase one lot of 51,000 strike calls at 500 rupees and one lot of 46,000 strike puts at 350 rupees.
Required Margin: Rs. 50,000
net premium (in Indian rupees, or 1,750 points) received
Maximum Danger: 11,250 Rupees, or 750 points
Size of lot: 15
Make money if it stays in the 46,750–50,250 zone.
Kotak Securities' Head of Equity Research, Shrikant Chouhan
The Bank Nifty index is maintaining a higher bottom shape on daily charts, which is generally favorable, despite the gloomy atmosphere in the market. The 20-day SMA, or 48,300, would serve as a sacred support level for trend-following traders. Should it be able to trade over this barrier, it may rise to 49,500–49,800. On the other hand, traders could choose to cut their long trading positions below 48,300 or the 20-day SMA.
Crucial Opposition: 49,500, 49,800
Important Assistance: 48,300
Strategy: Traders may choose to reduce their long holdings below 48,300.
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