After The Bell: Nifty hits 15,600, what should investors do on Tuesday?

Market Outlook

A smart rally in heavyweight stocks helped benchmark indices to put up a strong show on May 31 despite mixed trends in the global market. The Nifty50 hit a fresh record high at 15,606, while the S&P BSE Sensex had a touch-and-go moment with 52,000.

The Sensex finally settled at 51,937, 514 points higher, and the Nifty50 closed with gains of 147 points at 15,582.

Sectorally, the rally was seen in energy, metal, telecom, and oil & gas stocks, while some profit-taking was seen in IT and auto space.

The BSE midcap index rose 0.45 percent, and the smallcap index gained 0.5 percent, underperforming the benchmark indices that rose by about 1 percent.

“Amid mixed global trends, Indian equities registered gains ahead of Q4 GDP data, which has a mixed forecast but it is expected to be better for FY22 and increased optimism from declining COVID cases is helping the market,” Vinod Nair, Head of Research at Geojit Financial Services said.

“The rise in heavyweights supported the rally and sectors like metal, private banks, and energy witnessed maximum gains in anticipation of better economic growth,” he added.

Technically, the index surpassed 15,600 but failed to close above it. There could be bouts of profit-taking but the trend still remains on the upside and the next target could be around 15,750-15,900 experts said.

Here’s what experts think that investors should do on June 1:

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited

Technically, the Nifty50 formed a strong bullish candle on the daily scale and continued its formation of higher highs of the last seven sessions.

The index has to hold above 15,500 to witness an up move towards a fresh lifetime high of 15,750, while on the downside, support is at 15,431 and 15,300.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The index successfully achieved the target of 15,600 and is all set to approach 15,900.

There could be a pause or bouts of profit booking in the interim but those should be utilised to accumulate long positions for higher targets.

As long as the market closes above 15,300, the trend remains bullish and opportunities to buy on corrections should be maximised.

Ashis Biswas, Head, Technical Research, CapitalVia Global Research Ltd

The breakout above 15,600 is the key factor from a short-term perspective and for bulls to remain in control, the index must hold on to 15,250 to gain momentum, which will increase the odds for a movement till 16,000.

Momentum indicators like RSI and MACD will stay positive and market breadth will improve, further strengthening a short-term bullish outlook.

Gaurav Ratnaparkhi, Head, Technical Research, Sharekhan by BNP Paribas

The bulls are steering comfortably in the uncharted territory. The index had a minor dip at the beginning of the session, with which it filled up the recent gap area of 15,394-15,384. It also tested a rising trendline on the hourly chart as well as a 20-hour moving average.

Once that was done, the index witnessed a fresh round of buying and started the next leg up. Expanding hourly and the daily upper Bollinger Bands are supporting the bulls on the way up.

Thus the benchmark index is expected to stay on the upward trajectory with targets placed at 15,700 and 16,000. On the other hand, the short-term support zone shifts higher to 15,400-15,370.

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