TRADE SETUP FOR JUNE 24: NIFTY LOOKS TO END EXPIRY ON A HIGH BUT WILL BANKS, IT LEND SUPPORT?
The Nifty huffed and puffed but managed to eke out some weekly gains on Friday despite ending in the red. It has been under a positive consolidation for the last nine trading sessions and has not seen a move of 1% or more on either side since June 7. At one point on Friday, the Nifty had slipped even below 23,400 but managed to recover over 100 points from the day's low to end right at the 23,500 mark.
The upcoming week will be the June F&O series expiry and it has already been a 1,000-point series for the index on the upside. While it will aim to end the week and the series on a high, the question is, will it get the required support from banks and IT stocks that lent support to the index for most of last week?
IT stocks cheered Accenture's results on Friday but most of them gave up their early gains but still managed to end higher. The Nifty Bank though, was the star of the week gone by and when that came off the highs on Friday, it took the Nifty along with it as well.
While the Nifty remains in consolidation mode, the action will lie in specific stocks, as has been the trend in the last few trading sessions. Most of the GST-linked names from fertilisers, to road construction companies to even Delta Corp, may see a reaction during Monday's trading sessions. Block deals also continue with CarTrade Tech likely to see one go through on Monday.
Foreign investors returned to be net sellers in the cash market on Friday, while domestic investors were back to being net buyers.
Amol Athawale of Kotak Securities expects the Nifty to take a dip towards levels of 23,300 till it trades below the mark of 23,650. In case the index slips below 23,300, it can also see levels of 23,175. Only a break above 23,650 can take the index back to levels of 23,800 or even 24,000.
The short-term trend of the Nifty remains rangebound but with a weak bias. A move below the immediate downside support of 23,300 - 23,250 can possibly indicate the start of a short-term downward correction in the market., said Nagaraj Shetti of HDFC Securities.
Angel One's Osho Krishnan is of the view that the small-bodied candle formations suggest that the bulls may be reaching their limit and could be waiting for an external trigger to continue their momentum. On the upside, he sees 23,650 - 23,700 as potential resistance levels, while 23,400 on the downside can be a key support, followed by 23,200 and 23,100.
The Nifty Bank witnessed its best week of 2024, ending with gains of over 3% but signs of exhaustion were visible on Friday at higher levels, when the index came within 60 points of the 52,000 mark, but could not sustain at those levels. It closed nearly 300 points off the highs of the day and with losses.
In fact, the index traded in a very wide 700-point range on Friday, falling to lows of 51,200 but recovering from those levels by closing. This was also the sixth straight weekly gain for the Nifty Bank. For the June series so far, the Nifty Bank has gained over 3,000 points.
The Nifty Bank has formed a bearish engulfing candlestick pattern, which means that the previous high of 51,935 will now act as a barrier, while the earlier record high of 51,134 will be a support, said Hrishikesh Yedve of Asit C Mehta Investment Interrmediates. He expects the Nifty Bank to consolidate in the 51,000 - 52,000 range.
Om Mehra of SAMCO Securities also expects the Nifty Bank to consolidate in the near-term, having formed a bearish candle on its daily charts. 50,600 on the downside is seen as a strong support, while the upper bollinger band resistance is seen at 52,000.
What Are The F&O Cues Indicating?
Short covering was seen in these stocks on Friday, meaning an increase in price but a decline in Open Interest:
| Stock | Price Change | OI Change |
| SAIL | 0.29% | -32.91% |
| Biocon | 0.36% | -19.01% |
| Mphasis | 0.20% | -13.24% |
| Hindalco | 1.04% | -12.79% |
| Infosys | 0.71% | -10.29% |
Unwinding of long positions was seen in these stocks on Friday, meaning a decline in both price and Open Interest:
| Stock | Price Change | OI Change |
| Chola Finance | -2.42% | -7.25% |
| M&M | -1.37% | -7.17% |
| Adani Enterprises | -2.12% | -6.92% |
| Abbott India | -0.48% | -6.81% |
| Syngene | -0.45% | -6.64% |