Weekly Market Outlook for 5 June to 9 June

Nifty started the week on a positive note, but it then consolidated within a range for the entire week and ended above 18500 with marginal gains.

Nifty Today:

It was a week of consolidation for the markets as both Nifty and BankNifty traded within a narrow range throughout the week. However, the broader markets kept their momentum intact and the Midcap index continued to click new record highs. So the market trend continues to be positive, but we have witnessed some selling by the stronger hands in the index futures segment in last couple of sessions. The long positions of FII’s in the index futures segment have reduced from 62 percent to around 45 percent which indicated profit booking by them. Also, the momentum readings on the Nifty Midcap index has now approached the overbought zone post the relentless run up in last couple of months. Hence, short term traders should be watchful on some important levels to determine the possible trend in the coming week. During mid-May, 18450 acted as a resistance and a breakout above this level later on led to an upmove. So this level should now be considered as an important support and in case it gets breached, then one should expect some correction in the index towards the 20 DEMA support which is placed around 18340. The Bank Nifty index also has not breached its 20 DEMA support in last couple of months and it's now trading around this support which is around 43700. A break below this support could then lead to a correction in the index towards its next support which is placed around 43100. However, until the above mentioned supports are intact, the near term uptrend remains intact. On the higher side, 18600-18650 is the immediate resistance zone and a breakout above the same will lead to a continuation of the uptrend. Above this hurdle, one can expect the index to move towards 18750-18800 which is the higher end of a rising channel. 

                                                        Nifty consolidates inspite of positive news flows; profit booking seen by FIIs

During the week, a lot of positive news flows were seen such as higher than expected GDP numbers, clarity on uncertainty over US Debt ceiling and INR appreciation. However, our markets still did not witness any trending move and hence, breakout on either side of levels mentioned above will be crucial to determine the short term direction.

Nifty, Bank Nifty Levels and FINNIFTY Levels:

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