Zee Business Managing Editor Anil Singhvi has outlined his market strategy for June 5, offering keen insights into the expected movements of the Nifty50 and Nifty Bank indices. With the NDA looking poised for a third consecutive term at the Centre, Singhvi’s analysis provides essential guidance for investors and traders navigating the immediate post-election market landscape.
For the Nifty50, he sees support emerging between 21,625 and 21,825, with a stronger support zone from 21,275 to 21,525. Resistance levels are pegged higher, with a zone between 21,975 and 22,075, and a profit-booking range from 22,200 to 22,500.
For the Nifty Bank, support is expected at 46,325-46,575 and a stronger zone at 45,825-46,075. Resistance for the banking index is anticipated at 47,350-47,500, with profit-booking likely between 47,950 and 48,225.
The broader market sentiment, according to Singhvi, is a mix of positive and negative cues. While the global outlook appears positive, domestic sentiments are less optimistic. FII and DII both exhibit negative trends. The F&O segment remains neutral, contributing to an overall negative sentiment and trend in the market.
The data further underscores the cautious mood. The Nifty put-call ratio has dropped to 0.73 from the previous day’s 1.04, while the Nifty Bank PCR has declined to 0.46 from 0.75. India VIX, has surged by 27.75%, indicating increased market uncertainty.
Singhvi’s analysis also highlights several critical factors that will influence market direction. Key among them is the formation of the new government, the leadership it will adopt, and the allocation of departments to allies. Additionally, the nature of the upcoming Budget—whether it will be strong or populist—will be closely watched.
The behavior of FIIs and DIIs will also play a significant role. FIIs, currently in a selling mood, are unlikely to make a significant return until after the Union Budget, especially given the current alliance-based government’s decisions. Meanwhile, DIIs, which have been a counterbalance to FII outflows, face a crucial test. The lack of inflows from SIPs and mutual funds could exacerbate market pressures if retail and high net-worth investors start redeeming their investments.
For investors, Singhvi advises a cautious approach. Maintaining existing investments and continuing SIPs is crucial. However, significant new investments should be deferred until there is more clarity on key market triggers. Portfolio adjustments are necessary, with a shift towards defensive stocks and a reduction in high-beta exposure. Investing in large-cap stocks, along with selective mid-cap and small-cap scrips, is also recommended.
Traders, on the other hand, should brace for continued volatility. Singhvi suggests keeping intraday and overnight positions light and adhering strictly to stop loss levels. It’s also vital for traders to diversify their strategies, learning to trade by selling as well as buying.
For those with existing long positions, the intraday and closing stop loss for the Nifty is set at 21,600, while for the Nifty Bank, the intraday stop loss is at 46,000 and the closing stop loss at 46,300. For short positions, the Nifty intraday stop loss is 22,225, with a closing stop loss at 22,500. For the Nifty Bank, the intraday stop loss is at 47,500, with the closing stop loss at 48,000.
