Nifty started the June month with an upside gap of 150 points and continued its positive momentum towards 10300 mark in the first week. It witnessed a swift profit booking decline of around 800 points in second week of June after a sharp rally of 1500 points in previous 14 sessions. However, bulls took the corrective move as buying opportunity and again pulled the index above 10500 mark. Eventually, Nifty concluded the month a tad above 10300 levels, with the gains of 7.5%. At the same time, index ended the quarter with massive gains of 19.82%, which is biggest quarterly gain in last 11 years. It had given a narrow range breakout on monthly scale and formed a bullish candle on monthly as well as on quarterly chart with positive price setup.
Index has been forming Higher top – Higher bottom on daily and weekly scale, which is a positive sign as per ‘Dow Theory’. It is also sustaining well above its rising support trend line on daily scale by connecting all the recent swing low of 7511, 9004, 9544, 9845, 10250 and 10300 levels with its comfort above 50 DEMA, which also has a positive implication. Despite so much of selling pressure from FIIs, market didn’t correct much and every decline is being bought thus showing inherent strength for ongoing positive momentum. Market Breadth also remained strongly in favour of advancing counter in most part of the June month, indicating broad based buying and sector participation in the market. At current juncture, index is hovering around its resistance of 200 DEMA and 61.80% retracement level of the entire fall from 12430 to 7511, which is placed at
10500 – 10550 zone. A sustainable move above the same may lead for an up move towards 10800 and then 11200 zones. On the flipside, strong support for Nifty is placed at 10180 and then 9889 zone. Considering overall chart structure, we are expecting positive momentum to continue in coming days and thus advise traders to continue with buy on decline strategy in the market.
A sustainable move above 10500-10550 zone may lead for an up move towards 10800 and then 11200 zones. On the flipside, strong support for Nifty is placed at 10180 and then 9889 zone.