Trade Setup For June 7: Technicals Show Positive Momentum Intact For Nifty

Indian equity benchmarks are poised for a positive momentum on the technical front going ahead, aided by stability on the global front.

The markets have witnessed investors buy during meaningful declines and major trend remains intact, according to Chandan Taparia, senior vice president, equity derivatives and technicals, broking and distribution, Motilal Oswal Financial Services Ltd. "Now it (Nifty) has to hold above 22,750 zones for an upside move towards 22,950, then 23,100 zones, whereas supports are placed at 22,650, then 22,450 zones."

On intraday charts, the market is still holding uptrend continuation formation, which is broadly positive, according to Shrikant Chouhan, head of equity research, Kotak Securities Ltd. "We are of the view that, the index has completed one leg of pullback rally and we could see some profit booking at higher levels."

For the day traders, 22,650 would act as a key support level and as long as the market is trading above the same, the positive sentiment is likely to continue, he said.

The Nifty Bank has formed a tiny red candle on the daily scale, indicating a pause after strong upward momentum, according to Hrishikesh Yedve, assistant vice president, technical and derivatives research at Asit C. Mehta Investment Interrmediates Ltd. "The 34-Day Exponential Moving Average is positioned near 48,190, which will act as immediate support for the index, followed by 47,500, where the 100-DEMA is placed."

The Reserve Bank of India's Monetary Policy Committee will announce its key lending rate decision on Friday. MPC is likely to maintain status quo amid the continuing need to bring down inflation further, even as economic activity remains strong.

The GIFT Nifty was trading 28.5 points, or 0.12% lower at 22,919.5 as of 06:43 a.m.

The Nifty June futures were up by 1.28% to 22,899.5 at a premium of 78.1 points, with its open interest up by 4.15%. The Nifty Bank June futures were up by 0.64% to 49,435.75 at a premium of 143.85 points, while its open interest was down by 7.5%.

The open interest distribution for the Nifty June 13 series indicates that the 20,200 level is seeing the most put strikes, and call strikes of 24,000 have the maximum open interest.

For the Bank Nifty options' June 12 expiry, the maximum call open interest was at 55,000 and the maximum put open interest was at 45,000.

Overseas investors stayed net sellers of Indian equities on Thursday for the third consecutive session.

Foreign portfolio investors offloaded stocks worth Rs 6,867.7 crore, while domestic institutional investors stayed net buyers for the second straight session and bought equities worth Rs 3,718.4 crore, according to provisional data from the National Stock Exchange.

Benchmark equity indices extended their recovery for a second consecutive session after the steep fall they witnessed on counting day.

The Nifty closed around 400 points lower than its highest-ever close on Monday and the Sensex was nearly 1,400 points below its highest close.

The NSE Nifty 50 closed 231.40 points, or 1.02% higher at 22,851.75, and the S&P BSE Sensex ended up 692.27 points, or 0.93% at 75,074.51.

Most sectoral indices ended higher. Nifty Realty was the top gainer and Nifty FMCG and Nifty Pharma fell.

The broader markets outperformed the benchmark indices on Thursday as the BSE MidCap closed 2.28% higher and the BSE SmallCap ended 3.06% up.

All 20 sectoral indices on the BSE rose. The BSE 250 SmallCap gained the most by 3.18%. The market breadth was skewed in the favour of buyers. Around 3,010 stocks advanced, 833 declined, and 102 remained unchanged on the BSE.

• ICICI Bank Ltd.: The Securities and Exchange Board of India has issued an administrative warning to the bank regarding the outreach by its employees to influence votes for delisting equity shares of ICICI Securities Ltd.

• Hero MotoCorp Ltd.: India’s largest two-wheeler maker picked up an additional 2.2% stake in the Bengaluru-based electric mobility startup Ather Energy for Rs 125 crore.

• Wipro Ltd.: The company has been awarded a $500-million deal by a leading US communication service. The contract value is around Rs 4,175 crore.

• PB Fintech Ltd.: SEBI issued show-cause notice to Chief Executive Officer Yashish Dahiya. A notice was also sent to the company's Dubai unit, over investment of $2 million for a 26.7% stake in YKNP Marketing Management. The company is seeking legal advice on the SEBI notice.

Most stocks in the Asia-Pacific region were trading higher on Friday after a mixed session in the US, ahead of the release of the key jobs data.

The Nikkei 225 was 17 points or 0.05% up at 38,730, and the KOSPI was 19 points, or 0.68% higher at 2,070, as of 06:40 a.m.

US stocks and bonds passed their rally and ended mixed ahead of the key US jobs reading that will help shape the outlook for the Federal Reserve’s next steps.

The S&P 500 fell 0.02% and the Nasdaq Composite declined 0.09% as of Thursday. The Dow Jones Industrial Average advanced by 0.20%.

Brent crude was trading 0.26% higher at $80.08 a barrel. Gold fell 0.05% to $2,374.92 an ounce.

US Dollar Index at 104.15.

US 10-year bond yield at 4.29%.

Brent crude up 0.28% at $80.09 per barrel.

Nymex crude up 0.26% at $75.75 per barrel. 

Bitcoin was up 0.21% at $70,838.38.

The Indian rupee closed weaker against the US dollar on Thursday, even as the fall in the dollar index was offset by a rise in crude oil prices.

The local currency weakened by 10 paise to close at Rs 83.47 against the greenback, according to Bloomberg data.