The trends on Gift Nifty also indicate a flat-to-positive start for the Indian benchmark index. The Gift Nifty was trading around 23,020 level, a premium of nearly 20 points from the Nifty futures’ previous close.
On Monday, the domestic equity benchmark indices ended flat after hitting their fresh record highs.
The Sensex eased 19.89 points to close at 75,390.50, while the Nifty 50 settled 24.65 points, or 0.11%, lower at 22,932.45.
Nifty 50 formed a bearish candlestick pattern at the all-time high level on the daily charts, indicating profit booking.
“Yesterday’s negative closing seems to be more of a breather after the recent sharp upmove. Nifty continues to hold above the 20 and 50 day SMA. 14-day RSI at 66.63 is rising and not overbought, which is encouraging. While we expect further upsides and new life highs in the coming sessions in the run up to the election results, we remain open to volatile movements in the very near term,” said Subash Gangadharan, Senior Technical/Derivative Analyst at HDFC Securities.
According to him, crucial supports to watch for more weakness are at 22,908 – 22,871.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty OI Data
An analysis of Nifty put options reveals a concentration of Open Interest (OI) at the 22,700 level, implying potential support at this level. On the call side, significant OI concentrations are observed at the 23,200 and 23,500 levels, said Mandar Bhojane, Research Analyst at Choice Broking.
Rahul Ghose, CEO of Hedged.in noted that the higher Call Open Interest (OI) build up at the 23,100 and above indicates limited upside, the PCR tested 1.09 in the mid-session however failed to sustain above 1.09, in the last hour of the trading session it dropped to 0.88. According to him, Increased VIX was the primary reason for drop in the Nifty 50 index and the PCR.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — May 28
Nifty 50 Prediction
The Nifty 50 index ended almost flat in a volatile session on May 27 after hitting record highs during the day. The index settled down 0.11%, or 24.7 points, at 22,932.45.
“Nifty remained mostly volatile during the day as India awaits the final phase of the general election. The near-term outlook remains positive, with the index staying above the crucial moving averages. Support lies at 22,900, below which the index might slip towards 22,800. On the higher end, bears are active around 23,000-23,050,” said Rupak De, Senior Technical Analyst, LKP Securities.
According to him, a decisive move above 23,050 might trigger a stronger rally towards higher levels.
Also Read: Chandan Taparia recommendations: How to trade Axis Bank, HPCL, PFC shares on May 28
V.L.A. Ambala, Co-founder – Stock Market Today (SMT) believes that while the market is displaying bullish trends, it is currently overvalued. Hence, one can expect to observe a correction soon.
“Such a change in price movement would offer a lucrative opportunity for traders, who should consider holding on to their positions if they have a short-term view and seeking quality stocks to capitalize on potential dip opportunities. Similarly, those with long to mid-term investment views should consider booking some profits,” Ambala said.
She is of the view that Nifty could gain support around 22,920, 22,845, and 22,790 points, and face resistance between 22,970 and 23,050.
Also Read: Lok Sabha Elections 2024 trading strategy: How to trade on results date? — explained
Bank Nifty Prediction
The Bank Nifty index rallied 310 points to close at 49,281 on Monday, forming a bullish candlestick pattern with a long upper shadow on the daily charts.
“Bank Nifty opened above the 49,000 resistance level but encountered selling pressure around the 49,600 – 49,800 range, setting 49,600 as a new resistance level. Significant put writing at the 49,000 strike price indicates strong support at this level. Closing above 49,600 could drive Bank Nifty towards 50,000,” De said.
Overall sentiment is bullish, he added, recommending a buy-on-dip strategy with a stop loss at 48,900.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 28 May 2024, 07:22 AM IST
