Trading activity for the June series started on a mildly positive note; however, following Friday’s weak undertone, there was no extension to the morning gains. As the session progressed, prices gradually drifted lower, and once Nifty slipped below Friday’s low, selling pressure intensified. The index eventually ended the day with a cut of around 0.70%, closing tad below the 23450 mark.

On the daily chart, prices have slipped below the rising trendline connecting the April low of 22182 and the May swing low of 23262, indicating a bearish breakdown. Although Nifty spent most of last month consolidating and forming a higher base around the key 50%–61.8% retracement zone of the rally from the April lows, this support band between 23250–23100 is now likely to be retested. Considering the recent trendline breakdown, the probability of this higher-bottom structure coming under pressure has increased. Hence, traders should remain cautious and avoid aggressive long positions until clear signs of bullish resumption emerge. In terms of levels, 23250–23100 remains the immediate support zone. A decisive breach below this band could open the doors for a move towards the 78.6% retracement level near 22700. On the upside, the 50 DEMA, which has recently acted as a supply zone, remains a key hurdle and is currently placed around 24000. Until prices sustain above this level, the tendency of selling on rallies is likely to persist. Before that, the trendline breakdown area and today’s high coinciding with 20DEMA around 23750 are expected to act as immediate resistance. Traders are advised to closely monitor these levels and structure their trades accordingly.

Key levels to watch

NIFTY

Support: 23250 – 23150

Resistance: 23750 – 24000

BANKNIFTY

Support: 53150 – 52800

Resistance: 54200 – 54500

Rajesh Bhosale, Technical Analyst, Angel One.