Technical view on Nifty and Bank Nifty ( 31 May- 4 June)
Technical View on Nifty and Bank Nifty futures ( 31 May – 4 June ): Indian stock markets closed higher around 2 percent for the week ended 28 May. Markets gained on the hopes of lockdown relaxations, the stimulus package for covid hit sectors, and positive global cues. Next week, Indian markets will have big events like GDP data, RBI Policy, PMI numbers, etc.
The key factors that may impact the Indian stock markets for the next week are
Auto Sales Number
The Auto sales numbers for the month of May are expected to release on 1st June. The new registrations of automobiles are going to hit in the month of May due to the lockdown and restrictions imposed in several places in India. According to leading research and sales forecasting agencies, the auto sales estimates for FY22 have revised and downgraded by 5-10 % points. The Agency believes that the lost business during the first quarter would be hard to recover through the latter half of the year. Traders need to remain cautious next week in the auto space.
Economic Data
The main event that is scheduled for the next week is two days of RBI Monetary policy and its outcome. The RBI is expected to hold rates and maintain an accommodative stance in its upcoming policy review, that scheduled for next week. The GDP growth and PMI numbers are also equally important for the market next week. The schedule for the economic data for next week are given below
| Economic Data Next Week | |
| 31 May 2021 | GDP March 2021 quarter, YoY |
| 31 May 2021 | Infrastructure output |
| 1 June 2021 | Markit PMI Manufacturing |
| 1 June 2021 | Balance of Trade |
| 3 June 2021 | Markit Service PMI |
| 4 June 2021 | RBI Interest rate decision |
Q4 Quarterly results
Most of the Nifty 50 companies have announced their 4th quarterly corporate earnings. ITC is going to announce its 4th quarterly earnings on 1st June along with several other midcaps and smallcap companies in the next week. So far corporate have announced better Q4 earnings.
Global market cues
The global markets mostly closed higher for the week ended 28 May. The improved economic data in the U.S, reopening businesses in European countries supported the market global market sentiments. Next week, traders should closely monitor below give economic data
| Important Global Macro Data Next Week | ||
| 31 May 2021 | Industrial Production & Retail Sales | Japan |
| 31 May 2021 | NBS Manufacturing & Non-Manufacturing PMI | China |
| 31 May 2021 | Consumer Confidence | Japan |
| 1 June 2021 | Jibun Bank Manufacturing PMI | Japan |
| 1 June 2021 | Caixin Manufacturing PMI | China |
| 1 June 2021 | Markit PMI Manufacturing | GB |
| 1 June 2021 | Markit PMI Manufacturing | USA |
| 3 June 2021 | Jibun Bank Service PMI | Japan |
| 3 June 2021 | Caixin Service PMI | China |
| 3 June 2021 | Markit PMI Service | GB |
| 3 June 2021 | Markit PMI Service/ Jobless Claim | USA |
| 4 June 2021 | Monthly Unemployment rate | USA |
Technical View on Nifty and Bank Nifty futures ( 31 May – 4 June)
Technical view on Nifty Futures for the week ( 31 May – 4 May)
Primary Trend of Nifty futures for next week: Positive
Range-Bound Trend of Nifty futures: All up Moves Initiates Profit Booking (Sale) @ 15600 whereas All Down Moves Initiates Short Covering (Buy) @ 15400
Suppose Nifty share price in futures Moves Above 15512 and sustain. Then you should Buy Nifty futures with 1st Target of 15546 during the day or week with a Stop Loss of 15445 FOR the Target of 15546- 15590- 15627- 15658
Suppose Nifty share price in futures Moves Below 15445 and sustain. Then you should Sell with the 1st Target of 15409 during the day or week with a Stop Loss of 15256. FOR the Target of 15409- 15384- 15346 -14305
Technical View on Bank Nifty for next week ( 31 May – 4 June)
Primary Trend of Bank Nifty future for the week: Positive
Range-Bound Trend of Bank Nifty share price in future: All up Moves Initiates Profit Booking (Sale) @ 35900, whereas All Down Moves Initiates Short Covering (Buy) @ 35000
Suppose the Bank Nifty share price in the futures Moves Above 35550 and sustains. Then you should Buy Bank Nifty futures with the 1st Target of 35660 during the day or week with a Stop Loss of 35130. FOR the Target of 35660 – 35925- 36180- 36445
If Bank Nifty shares price in the future Moves Below 35130 and sustained. Then you should Sell with the 1st Target of 35010 during the day or week with a Stop Loss of 35550. FOR the Target of 35010- 34880- 34665 – 34380
FII & DIIs investment in Indian stock markets
Foreign Institutional Investors (FIIs) have turned buyers while Domestic Institutional investors (DIIs) have sold in the cash market during the week ended 28 May. FIIs have bought Rs 2039.42 crores while DIIs have sold Rs 322.27 crores in the cash market segment during the week.
FIIs turned net sellers in the month of April and May ( till 28 May) due to the fears of the second wave of coronavirus cases and its fallout on the Indian economy. They started selling in the emerging markets from the month of January 2021. Basically, FIIs have turned risk-averse and shifted their focus towards safer investment options or safe havens such as gold, US dollar, as against investing in fixed income securities of emerging markets like India.
However, the good part was DIIs have turned buyers to support the domestic markets. They were net sellers in the equity markets last year. But last week’s FIIs turned positive again, it may be due to reopening businesses in India. FIIs may not buy aggressively into the domestic market unless they sense for the economic recovery. Traders need to closely monitor FIIs activity in the next week.
Coronavirus risk & Vaccination
The daily coronavirus count in India is the lowest in 45 days. India recorded 1,73,790 fresh coronavirus cases with 3617 death in a single day, according to Union Health Ministry updated on Saturday. The daily positivity further declined to 8.36 percent, remaining below 10 percent for five consecutive days. The active coronavirus cases have continued to reduced to 22,28,724 as daily recoveries outnumbered the daily new cases for the 16th consecutive day.
On the vaccine front, so far India administered more than 20.89 crores of vaccine, as reported on Saturday. Due to the shortage of vaccines, the vaccinations in the month of May were about 40% less than that in April. According to V.K Paul, member (health), Niti Aayog, all adult Indian’s should be vaccinated by the year-end.
As coronavirus is declining, the lockdown relaxations are going to start from the 1st week of June. Lockdown in Delhi is going to be relaxed partially from 31st May and many other states are likely to follow Delhi in the coming days. Traders should closely follow the news of reopening the businesses in India, this would be positive for the market next week.
You can also read daily morning market updates before the markets get open and daily Nifty and Bank Nifty Futures Technical view in the evening on our website.
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Happy Investing!!
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