Nifty predictions June 21: Investors in wait and watch mode near all-time high; resistance seen at 18,850

The Indian equity market is expected to open on a cautious note Wednesday following mixed cues from Asian peers amid overnight decline in US stocks.

Trends on SGX Nifty also indicate a mildly negative start for the broader index in India. The Nifty futures were trading 16.5 points, or 0.09%, lower at 18,864.5 on the Singaporean Exchange.

Investors remained cautious ahead of the US Federal Reserve Chair Jerome Powell’s testimony in the congress. Analysts expect a hawkish tone from Powell as the central bank forecasts around two more quarter-point rate hikes this year.

Also Read: Global market: SGX Nifty, PM Modi’s US visit to Fed Chair’s testimony - key triggers for Indian stock market

On Tuesday, the Indian benchmark equity indices, Sensex and Nifty ended higher helped by fag-end buying despite weak global cues after China cut interest rates by less than expected.

The BSE Sensex ended 159.40 points, or 0.25%, higher at 63,327.70, while the Nifty closed at 18,816.70, up 61.25 points, or 0.33%. Broader markets outperformed the frontliners as the Nifty Midcap 100 and Nifty Smallcap 100 indices gained half a percent each.

Market rally was led by gains in IT, auto, metals, realty, banks and financial services stocks.

“After a minor hiccup, markets resumed their upward journey toward a lifetime high as the domestic fundamentals remain strong. We expect momentum to continue with the overall structure still intact. Investors would focus on PM Modi’s visit to the US as this will strengthen ties and deal wins,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

On the technical front, after showing weakness from the swing highs on Monday, Nifty witnessed sharp intraday upside recovery from the lows on Tuesday and closed the day higher by 61 points. 

Nifty has now formed a bullish piercing pattern and the momentum indicator Relative Strength Index (RSI) indicates a bullish crossover. 

Also Read: Day trading guide for today: Six buy or sell stocks for Wednesday — June 21

“A reasonable positive candle was formed on the daily chart with a long lower shadow. Technically, this pattern indicates strength of near term uptrend in the market with buy on minor dips opportunity. Hence, one may expect Nifty to zoom into all time highs in the next few sessions,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

He believes near term uptrend in Nifty remains intact and one may expect Nifty to reach up to 19,100-19,200 levels in the next 1-2 weeks.

Nifty

The overall trend appears positive as the Nifty closed above the 18,800 level in the previous session.

“The momentum indicator, Relative Strength Index (RSI), indicates a bullish crossover, suggesting increasing buying pressure. Looking ahead, resistance levels are expected around 18,850-18,900 on the higher end, indicating potential price barriers,” said Rupak De, Senior Technical at LKP Securities.

On the lower end, he expects support for Nifty is placed at 18,700, indicating a level where the stock may find buying interest.

Also Read: Buy or sell: Vaishali Parekh recommends buying in 3 stocks today — 21 June

Nifty Bank

The Bank Nifty index saw the bulls hold a support level of 43,400. Currently, the index is trading within a broad range between 43,400 and 44,000. 

“A breakout on either side of this range is likely to result in trending moves. As long as the support level of 43,400 is held, a buy-on-dip approach is suggested. Once the index surpasses the level of 44,000 it will witness sharp short covering on the upside towards 45,000 levels, said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.

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