Nifty 50 and Sensex continue to move up well. Both the indices have risen breaking above their key near-term resistance. The indices were up over a per cent each last week. The outlook is bullish, and the Sensex and Nifty can rise further in the short term. However, as mentioned last week, crucial resistances are coming up. The current rally can halt around that resistance. We expect the Sensex and Nifty to run into a correction after some more rise from here.
Nifty and Bank Nifty Prediction for the week 08 Jul’24 to 12 Jul’24 by BL GURU
The Nifty Bank index, on the other hand, seems to be struggling to get a strong follow-through rise over the last couple of weeks. The index was up about 0.6 per cent and seems to be losing steam. Although there is room to rise, a near-term dip is a possibility before a fresh rise is seen.
Among the sectors, barring the BSE Consumer Durables (down 0.22 per cent) all other indices closed in green last week. The BSE IT index outperformed by surging 4.15 per cent. This was followed by the BSE PSU and BSE Capital Goods indices. They were up 3.95 per cent and 3.88 per cent respectively.
FPI flows
The foreign portfolio investors (FPIs) were net buyers of Indian equities for the fourth consecutive week. The equity segment saw a net inflow of about $953 million last week. Continuing flows can aid the Sensex and Nifty to sustain higher and make more new highs, going forward.
Nifty and Bank Nifty Prediction for the week 08 Jul’24 to 12 Jul’24 by BL GURU
Nifty 50 (24,323.85)
Barring the dip to the low of 23,992.70 on Monday, Nifty managed to sustain well above 24,000 all through last week. It rose to a high of 24,401 and has come down slightly from there. The index has closed at 24,323.85, up 1.3 per cent for the week.
Short-term view: The outlook is positive. Immediate support is at 24,200. Below that 24,000 is the next strong support. We expect the Nifty to sustain above 24,000 in the short term. A rise to 24,600-24,650 is possible in a week or two. A break above 24,650 can take the Nifty up to 24,800-24,850 in the short term.
The short-term view will turn negative only if the Nifty declines below 24,000. If that happens, a fall to 23,600-23,500 can be seen. But such a fall is less probable.
Medium-term view: The region around 24,650 and 24,800 are very strong resistances for the Nifty. We expect the current rally to halt at 24,650 itself or around 24,800. Nifty is likely to see a corrective fall thereafter, which can drag it down to 23,500 or even lower over the medium term. In case the sell-off intensifies, the downside can extend even up to 22,000.
So, as the Nifty goes up to 24,800, we prefer to turn cautious rather than becoming overly bullish.
Nifty Bank (52,660.35)
Nifty Bank index seems to be struggling to get a sustained rise above 53,000 over the last couple of weeks. The index rose to a high of 53,357.70 and then fell on Friday giving back some of the gain. It has closed the week at 52,660.35, up 0.61 per cent.
Short-term view: The struggle to breach 53,000 leaves the near-term outlook slightly weak. There is a possibility of seeing a dip to test the supports at 52,000 and 51,500 in the near term. But a fall beyond 51,500 looks less likely at the moment.
The Nifty Bank index can reverse higher either from 52,000 itself or from 51,500. A decisive break above 53,000 will take the index up to 54,000-54,500 in the short term.
In case the Nifty Bank index declines below 51,500 from here, the rise to 54,000-54,500 will get negated. In that case, a fall to 50,500-50,300 can be seen.
Medium-term view: Immediate resistance is around 53,500 and support is at 52,000-51,500. As long as the Nifty Bank index stays above 51,500, the outlook will remain bullish to break 53,500. Such a break can take the index up to 54,500 and even 56,000.
The region around 56,000 is a strong resistance. The Nifty Bank index can see a corrective fall from around 56,000 towards 53,000 or even 51,000, going forward.
Sensex (79,996.60)
Sensex attempted to rise towards 80,500 as expected last week. The index made a high of 80,392.64 and has come down slightly from there. It has closed the week at 79,996.60, up 1.22 per cent.
Short-term view: The outlook is positive. Immediate support is at 79,300. Below that 78,700 is the next strong support. Sensex can rise to 80,800 first. A break above this level can take the index further up to 81,400 and 82,000 in the short term.
The short-term outlook will turn negative only if the Sensex declines below 78,700. If that happens, a fall to 77,200-77,000 can be seen.
Medium-term outlook: Sensex has room for a rise to 82,500 from here. However, the region around 82,500 is a strong long-term trendline resistance. So, the rally can halt there, and the index can reverse lower again. That in turn can drag the Sensex down to 78,000-77,000. So, as the Sensex moves up towards 82,000, we will have to look at the market from the sell side rather than becoming overly bullish.
Dow Jones (39,375.87)
The Dow Jones Industrial Average remained stable, and range bound above 39,000 all through last week. It has closed the week at 39,375.87, up 0.66 per cent for the week.
Outlook: The near-term outlook is unclear. Broadly, the Dow Jones has been stuck between 38,900 and 39,600 over the last couple of weeks. The chances of this sideways move continuing for some more time cannot be ruled out.
However, the bias is positive as long as the index stays above 38,900. We can expect the Dow Jones to breach 39,600 decisively going forward. That break will clear the way for the Dow Jones to target 40,000-40,200 on the upside.
This bullish view will get negated if the Dow Jones breaks below 38,900. Such a break can take the index down to 38,700 first. A further break below 38,700 will increase the downside pressure. It will then drag the index down to 38,000.