SGX Nifty at 18,870 indicates a flat opening for domestic markets on Wednesday. However, analysts expect the bullish momentum to continue due to renewed buying by domestic investors. Foreign portfolio investors have turned cautious in the last few days and resort to mild selling. This will keep market in a range, they added.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said: “We expect momentum to continue with the overall structure still intact.” 

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Investors would focus on PM Modi’s visit to the US as this will strengthen ties and deal wins. Also, all eyes will be on Fed chair Jerome Powell’s two-day congressional testimony starting on Wednesday. These could potentially hint at a July hike since the Fed signalled the possibility of more rate increases later in the year if inflation remained an issue, said Khemka.

Eyes on monsoon

On the domestic front, the focus has now shifted to the progress of monsoon. 

Mitul Shah - Head of Research at Reliance Securities, said: “Late monsoons have sparked worries among traders as this could be a sign of increased retail inflation which eased in May to a 25-month low of 4.25 per cent. Delayed sowing in key agricultural regions of Central India is likely to impact yield.”

As of June 19, monsoon is 33 per cent below normal. However the IMD indicated that the Southwest monsoon is expected to revive and progress further, he added.

Technically, the market is in bullion said analysts.

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Rupak De, Senior Technical at LKP Securities, saidthe momentum indicator, Relative Strength Index (RSI), indicates a bullish crossover, suggesting increasing buying pressure. “Looking ahead, resistance levels are expected around 18850-18900 on the higher end, indicating potential price barriers. On the lower end, support is placed at 18700, indicating a level where the stock may find buying interest,” he added.

Deepak Jasani, Head of Retail Research, HDFC Securities, said,Nifty negated the Dark Cloud Cover bearish formation formed on June 19 by ending in the positive. It has now formed a bullish piercing pattern. Nifty needs to break out of the 18669-18888 band for showing an acceleration in that direction, he added.

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