Sensex Gain 443 Points, Nifty at 24,750; Nifty Prediction for Tomorrow

Nifty and Sensex End Higher on Weekly Expiry: What’s in Store for the Market on June 6?

The Indian stock market saw positive momentum on the day of Nifty’s weekly expiry, with both the Sensex and Nifty closing higher.

Despite some volatility throughout the session, market sentiment was largely upbeat, aided by strong sectoral performances and a steady demand for select stocks.

The Sensex closed at 81,442, gaining 444 points for the day, while the Nifty finished at 24,751, up by 131 points.

This uptick in the broader indices reflected investor confidence, although there were some challenges faced by certain stocks, particularly from the banking and finance sectors.

Among the major gainers on the Nifty, stocks like Eternal, Dr. Reddy’s Labs, Trent, Power Grid Corp, and Reliance Industries stood out for their strong performance.

On the other hand, stocks like IndusInd Bank, Bajaj Finance, Axis Bank, Tata Consumer Products, and Bajaj Finance experienced a decline, reflecting some profit booking and sector-specific weakness.

While large-cap stocks led the charge, the BSE Midcap and Smallcap indices were also in the green, registering gains of 0.5% and 0.65%, respectively.

Notably, sectoral indices saw broad-based strength, with the pharma and realty sectors emerging as the top performers.

These sectors posted gains of 1-2%, suggesting that market participants were actively rotating capital into defensive stocks.

However, the PSU banks sector was an exception, showing underperformance and closing in the red, which could be attributed to broader macroeconomic concerns and ongoing structural issues in the public sector banking space.

Market Overview and Expert Insights:

According to Rupak Dey, Senior Technical Analyst at LKP Securities, the market is currently holding crucial support at the 24,500 level on the Nifty. Dey believes that as long as the index maintains its position above this support zone, the possibility of a serious correction remains low.

However, a decisive fall below this level could lead to a swift decline in the short term, with the next support potentially coming at 24,300.

Dey further elaborated that 24,500-24,475 is an important demand zone, which has seen repeated bounces in the past.

This level has been characterized by significant put writing, making it a key support zone for traders. If the market holds above this zone, the likelihood of a recovery remains strong.

However, Dey cautioned that the inability to maintain intraday gains, coupled with sustained overhead selling pressure, could signal a weakening bullish sentiment.

Technical Indicators and Market Sentiment:

The daily chart of Nifty revealed the formation of an “Inside Bar” pattern, a sign of market consolidation.

This pattern typically indicates indecision in the market, with both bulls and bears struggling to take control.

The Nifty has been hovering near the 24,500-24,475 support zone, which has provided stability in the past.

However, continued failure to breach the 24,850 resistance level and persistent selling at higher levels could cause the market to enter a range-bound phase.

This market behavior points to waning buying interest, despite the initial optimism seen in the opening minutes of trade.

Dhupesh Dhameja, Senior Analyst at SAMCO Securities, also weighed in on the outlook for June 6. He explained that if the Nifty holds above 24,475, there could be a modest pullback, with the potential to test higher levels.

However, a decisive close below this level could pave the way for a deeper correction, with 24,300 becoming the next potential support level.

On the upside, Dhameja pointed out that a breakout above 24,850 could lead to a short-covering rally, pushing the index toward the psychological level of 25,000.

However, he cautioned that strong resistance is expected around the 24,850-25,000 range, which could limit any further upside momentum in the short term.

Broader Market Dynamics and Sectoral Performance:

Market analysts also highlighted that the market is currently undergoing a phase of volatility, as evidenced by sharp fluctuations observed on Nifty during the expiry day.

Aditya Gaggar, Director at Progressive Shares, commented on the market’s performance, noting that the index displayed a strong opening but struggled to sustain higher levels throughout the day.

Gaggar highlighted the spinning top candlestick pattern formed on the daily chart, which signals uncertainty and volatility ahead of key events such as the upcoming Monetary Policy Committee (MPC) meeting.

He also emphasized that 24,900 continues to act as a key resistance level, while 24,500 remains an important support zone for the index.

This technical setup suggests that traders should be cautious in their approach and be prepared for significant volatility in the days leading up to June 6.

In terms of sectoral performance, pharma and realty sectors emerged as the primary drivers of the market’s gains.

Pharma stocks have been gaining attention due to their defensive nature, with investors flocking to them amid broader market uncertainty.

The realty sector, meanwhile, benefitted from positive sentiment regarding the housing market and the potential for increased government spending on infrastructure.

The midcap and smallcap stocks continued to show relative outperformance, suggesting that retail investors remain active and optimistic about the prospects of smaller, high-growth stocks.

Key Levels to Watch for Nifty on June 6:

• Support: The immediate support for the Nifty is seen at 24,500, with further support at 24,300 in case of a deeper correction.
• Resistance: The key resistance lies at 24,850, with a breakout above this level potentially driving the index toward the 25,000 mark.
• Key Indicators: A golden crossover visible on the daily chart suggests that the market could experience a strong uptrend in the near term if the support at 24,500 holds firm. The Relative Strength Index (RSI) has also made a positive crossover on the 2-hour chart, further indicating that bullish momentum may be building in the short term.

Final Thoughts: A Pivotal Juncture for Nifty and Sensex

As we approach June 6, the Indian stock market is at a crucial juncture. The Nifty is currently consolidating near critical support levels, and a breakout or breakdown from these zones will likely determine the short-term direction of the market.

The 24,500–24,475 range is the key support zone to watch, while 24,850 remains the immediate resistance.

Given the current technical setup, traders should remain vigilant and prepared for both potential volatility and sectoral rotations.

The MPC meeting and broader macroeconomic factors will likely influence market sentiment, so keeping an eye on these developments will be essential for navigating the market over the next few days.