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It’s going to be another volatile day for Indian equity markets with the General Election results coming in. Nifty 50 made some wild swings after opening with a wide gap-down at 23,179.50. The index tumbled to a low of 22,389.85 and bounced back to recover some of the loss. The index is currently trading at 22,750, down 2.21 per cent.
The early trends in the election results show a wide variation from the exit polls, triggering the sharp fall in the Nifty today. As the volatility is likely to remain high through the day, we suggest traders stay out of the market. Allow the market to settle down and then trade accordingly.
For today, we are sharing only the important levels to watch. Depending on how the market closes, we will take a stance on the direction of the move.
Nifty 50
The region between 22,800 and 22,850 will be a crucial resistance now. Nifty has to make a decisive close above 22,850 to regain the bullish momentum. Only then will there be a likelihood of a rise to 23,000-23,200.
If the Nifty continues to stay below 22,850 during the day, then there is danger of a fall to 22,500-22,400 today itself. That will keep alive the danger of the index breaking below 22,000 eventually this week.
Nifty 50 futures
The Nifty 50 June futures (22,794) is down 2.6 per cent. The contract has to rise past 23,000 to become convincingly bullish. It could then rise to 23,200 and 23,400 in the coming sessions.
As long as the contract trades below 23,000, it is likely to see 22,550-22,500 on the downside during the day.
A break below 22,500 will increase the downside pressure and take the contract down to 22,200.
Trade strategy
As mentioned earlier, stay out of the market. Allow it to settle after the final election results. Trades can then be taken accordingly in the coming days.
Supports: 22,500, 22,200
Resistances: 23,000, 23,200
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