Trade Setup For June 3: Nifty Finds Support At 24,400–24,500

The NSE Nifty 50 formed a small bull candle with a long lower shadow in the daily chart, signalling buying demand at lower levels, according to Bajaj Broking Research.

The research firm said that the Nifty will find support around the lower band of the last three weeks consolidation range placed around 24,400-24,500. It expects the index to extend consolidation in the resistance range of 24,400–25,080.

It also said a move above 25,080 levels will infuse fresh momentum and open further upside towards 25,300 levels.

"Failure to do so will signal extension of the last three weeks' consolidations. The consolidation index sustaining above 24,800 will lead to pullback towards the upper band of the last three weeks consolidation range placed around 25,000 levels," the research firm stated.

Shrikant Chouhan, head of equity research for Kotak Securities, said the current market texture is non-directional and recommended level-based trading as an ideal strategy for day traders,

The analyst identified 24,650 and the 20-day simple moving average or 24,700 as key support levels. Above these levels, he said that the market may move up to 24,820–24,900.

"On the flip side, below 24,650, selling pressure is likely to accelerate. If the market falls below this level, it could correct up to 24,500–24,450," Chouhan said.

The Bank Nifty has also formed a small bull candle, according to Bajaj Broking, but with a higher high and higher low signalling consolidation with positive bias. 

The index is currently placed at the upper band of the last five weeks with resistance placed around 55,800-56,000 levels, according to the firm.

"Going ahead, a move and a close above 56,000 levels will signal acceleration of the up move towards 56,700 levels in the coming sessions," the company said.

It identified immediate support at 55,000-55,200 levels, while the key short-term support was seen at 54,000-53,500. The research firm said that bias was still positive and advised investors to use a buy-on-drips strategy.