Trade Setup For May 6: Nifty 50 Finds Resistance Near 24,500 Levels

India's benchmark equity indices ended higher for the second session in a row on Monday.(Photo Source: Envato)

Australian share indices were trading in a narrow range in early trade Tuesday. Financial markets in Japan and South Korea are closed. China will re-open after a holiday.

The S&P ASX 200 was trading flat at 8,157.90 as of 6:48 a.m.

On Monday, Dow Jones Industrial Average and S&P 500 ended 0.24% and 0.64% down, respectively. The Nasdaq Composite index ended 0.74% down.

The Bloomberg dollar index was at 100.05. The Bloomberg spot gold was 0.83% up at $3,361.72 an ounce as of 6:51 a.m. Brent crude was trading 1% higher at $60.83 a barrel.

The GIFT Nifty was trading flat at 24,593.50 as of 6:52 a.m.

The NSE Nifty 50 continues to find resistance near the 24,500 levels, despite closing the market with gains for a second consecutive session on Monday, according to Aditya Gaggar, director of Progressive Shares Brokers.

A sustained move above this threshold could push the frontline index further towards 24,630 levels, the analyst said.

In case of a downside, Nifty 50 may find immediate support at 24,360 levels, Gaggar added.

The index has formed a small bullish candle on the daily charts, as per Shrikant Chouhan, head of equity research, Kotak Securities. Looking at intraday charts, the price action is currently forming a pattern that suggests the existing uptrend will continue, he added.

Chouhan said that 24,375 level would act as a key support zone, and the if the index moves higher, then it can test the levels of 24,600-24,675.

"On the other side, dismissal of 24,375 could trigger a quick intraday correction. Below the same, market could retest the level of 24,300-24,250," he added.

The Bank Nifty, a keenly tracked index, faces resistance in the zone of 55,700 to 56,000, said Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C. Mehta Investment Interrmediates. The support lies at 54,450, he added.

"A firm break below 54,450 may trigger fresh selling pressure, potentially dragging the index towards 54,000. Until then, a range-bound consolidation between 54,450 and 56,000 may continue," Yedve said.

Market Recap

India's benchmark equity indices ended higher for the second session in a row on Monday.

The NSE Nifty 50 closed 0.47% higher at 24,461.15, while the BSE Sensex ended 0.37% up at 80,796.84.

HDFC Bank Ltd.'s share price closed 0.61% higher at Rs 1,936. 80 apiece, while Mahindra & Mahindra Ltd. closed 3.26% higher at Rs 3,021.50 per share.

FII/DII Activity

Foreign portfolio investors stayed net buyers of Indian equities for the 13th straight session on Monday, as they bought stocks worth Rs 497.79 crore.

Domestic institutional investors remained net buyers for the sixth session in a row, mopping up equities worth Rs 2,788.66 crore, according to provisional data from the National Stock Exchange.

F&O Cues

Nifty May Futures up by 0.68% at 24,567 at a premium of 106 points.
Nifty May futures open interest up by 4.5%.
Nifty Options May 8 Expiry: Maximum Call open interest at 26,000 and Maximum Put open interest at 24,000.
Put-Call ratio at 0.77, with the highest change in Call open interest at 24,500.
Securities in ban period: RBL Bank, Manappuram Finance.

Major Stocks In The News

Senores Pharma: The company signed an agreement with Wockhardt to acquire USFDA-approved Topiramate tablets, used to treat epilepsy and migraine. The market size of Topiramate Tablet in the US was $111.47 million.
Paras Defence: The company signed an MoU with Israel-based Heven Drones to create new opportunities and expand both parties' business in the defence sector. The parties intend to form a JV company in India.
Glenmark Pharma: Ichnos Glenmark Innovation received USFDA fast-track status for ISB 2001, used to treat adult patients with relapsed or refractory multiple myeloma.
ONGC: The company completed the offshore facilities decommissioning project along with Reliance Industries and Shell.