Today Market wasn’t same for all sectors and based on analysis and observations, here’s a detailed breakdown of the market situation and potential trading strategies:
Market Overview
Nifty:
- RSI Levels: 61 (daily), 68 (weekly), 77 (monthly)
- Pattern: Bullish Marubozu on the daily timeframe
- Support Levels: 23570, 23500
- Resistance Levels: 23610, 23680
Bank Nifty:
- RSI Levels: 65 (daily), 69 (weekly), 70 (monthly)
- Pattern: Bullish Marubozu on the daily timeframe
- Support Levels: 51650, 51540
- Resistance Levels: 51950, 52000
Key Observations
- Nifty and Bank Nifty RSI:
- Both Nifty and Bank Nifty have high RSI levels, indicating overbought conditions, particularly on the monthly timeframe. This suggests caution as the potential for a pullback or correction is high.
- Bullish Marubozu Pattern:
- The bullish Marubozu pattern on the daily timeframe for both indices indicates strong bullish sentiment in the short term.
- India VIX Surge:
- The India VIX increased by 6.68%, closing at 14.06, indicating increased market volatility.
- Upcoming Events: VLA Ambala SEBI RA here on telegrams here – https://t.me/SMTStockMarketToday
- The general assembly speaker announcement on June 26th, coinciding with the monthly expiry for the June series, may lead to heightened volatility.
- Index Changes:
- Wipro has been replaced by Adani Ports in the Sensex, which could influence market dynamics, especially in the logistics sector. Get Trades from VLA Ambala SEBI RA here on telegrams here – https://t.me/SMTStockMarketToday
Trading Strategy
Given the current market conditions, here are two swing trade setups:
1. GRWRHITECH (Swing Trade)
- Trade Type: Buy
- Entry Price Range: 2110 – 2100
- Target 1: 2240
- Target 2: 2300
- Stop Loss: 1940
- Time Period: 1-5 Days
Rationale:
- The stock is positioned for a potential upward swing, with a target range significantly above the entry price, allowing for a favorable risk-reward ratio.
2. AEROFLEX (Swing Trade)
- Trade Type: Buy
- Entry Price Range: 155 – 158
- Target 1: 164
- Target 2: 167
- Target 3: 170
- Stop Loss: 149
- Time Period: 1 Day
Rationale:
- Short-term bullish momentum can be leveraged for quick gains. The stop loss is set to minimize downside risk.
Market Sentiment and Precautions
- Bullish Sentiment: Despite the gap-down opening, the indices closed positively, reflecting underlying bullish sentiment.
- High RSI Levels: Be cautious due to the overbought conditions on the monthly timeframe, which could lead to a potential sell-off if new highs are reached.
- Increased Volatility: The rise in India VIX suggests that market participants should prepare for increased volatility in the coming days.
Advice for Traders:
- Low Risk Tolerance: Those with a lower risk appetite should consider avoiding trading during the expiry sessions or ensure positions are adequately covered.
- Equity Focus: During high volatility periods, trading in equities may be less risky compared to options or futures.
In conclusion, while the market shows bullish signs in the short term, high RSI levels and upcoming events necessitate caution. Proper risk management strategies, including defined entry and exit points along with stop losses, are essential for navigating the current market conditions.
Vijay Laxmi aka VLA Ambala is SEBI registered Research Analyst and her research and view are being published in various media platforms as well- Check here – https://smtstockmarkettoday.com/pr-and-media/
Follow VLA Ambala SEBI RA here on telegrams here – https://t.me/SMTStockMarketToday