Nifty outlook: Indian equity markets remained under pressure most of the time on Tuesday, June 2. Even as Nifty 50 closed comfortably above the 23,480 mark on a late pullback led by heavyweight IT stocks, the key benchmark index has breached key support levels, raising concerns of a deeper correction ahead.
At close, the Sensex was up 382.50 points or 0.52 per cent at 74,649.84, and the Nifty was up 100.95 points or 0.43 per cent at 23,483.55.
Created with AI. Errors are possibleAccording to Vinay Rajani, Senior Technical & Derivative Analyst at HDFC Securities, the market’s technical structure has weakened significantly, with the Nifty slipping below multiple crucial moving averages and broader market indices also witnessing profit-booking.
Speaking to ET NOW, he further shared his complete market outlook, key support and resistance zones, and what traders should expect during expiry volatility.
Nifty breaking key supports
Speaking on the current market outlook, Rajani noted that the Nifty has gradually breached key support levels. He said the index fell below its previous swing low of 23,262 during intraday trade and touched a low of 23,229, indicating growing bearish momentum.
“The bias is on the weak bearish side,” he said, adding that the Nifty is currently trading below its 10-day, 20-day, 50-day, 100-day and 200-day moving averages, a sign of sustained weakness across short-, medium- and long-term time frames.
“That means across all the time frames Nifty is in, we can say that it is in a clear-cut bearish trend, and unless we see any level about 23,800, the trend would remain on the bearish side only. The only hope for traders is the gap support, which was there. To be precise, on April 8, Nifty opened with a big gap of 700 points and that gap range is at 23,155 to 23,700. So, basically, 23,150 is the lower end of this particular gap, which can act as a support. So, this is a lower band of the gap, and this is a hope that it should find support,” Rajani cautioned traders.
Nifty outlookIT and metal stocks outperform
Among sectoral pockets, information technology and metal stocks have emerged as notable outperformers and are providing support to the benchmark indices, Rajani said.
However, he said that the traders have to wait for the clarity to emerge. “So, for Nifty, our view is bearish as of now, and unless we see a 23,800 being taken out, we should remain cautious in the market,” he added.
“Stock-specific and sector-specific, there are some trading opportunities on the long sides that can be monetised by keeping a stop loss. So, 23,150 is the next support, and 23,800 is a level trigger level for bulls to come back into the markets,” the analyst further stated.
Vijay Rajani’s top stock picks
Noting that he was bullish on IT stock, he said, “No doubt we have seen a meaningful bounce and already 4-5% of the index has moved in the last two sessions, but still I see this strength continuing and some stocks are really oversold and have started participating.”
“LTIMindtree is looking very strong on the charts after a long time. This stock has bounced back and bounced back from the long-term support, also. That is also a good sign as the sector is also doing well. So, considering the overall rationale, I am considering LTIMindtree for the long trade. So in June future, one can go long in LTIMindtree around 4,300. Stop loss can be kept at 4180. For the traders, the target should remain at 4500,” he said.
He said the stock has shown encouraging price action after a prolonged period of weakness and could benefit from continued strength in the IT sector.
Trade Setup for LTIMindtree
- Buy: Around Rs 4,300
- Stop Loss: Rs 4,180
- Target: Rs 4,500
Vijay Rajani maintains sell for Bank of India
On the bearish side, Rajani recommends a short position in Bank of India, which he believes continues to exhibit technical weakness.
- Short: Around Rs 136.50
- Stop Loss: Rs 139
- Target: Rs 131
According to him, the PSU banking stock remains under pressure and could witness further downside in the near term.
“On the sell side, I’m recommending one PSU bank which is continually showing weakness. So, Bank of India is looking weak on the chart. So, Bank of India June future can be shorted around 136.50. 139 should be the trading stop loss on the downside. We are expecting a target of 131,” he concluded.
Vijay Rajani’s Market Outlook
The overall market outlook remains cautious for Rajani as he believes the Nifty is firmly entrenched in a bearish trend. He further noted that while stock-specific opportunities exist, traders should remain selective and maintain strict stop-loss discipline.
For the near term, 23,150 remains the key support level, while 23,800 is the critical hurdle that bulls must overcome to regain control of the market trend. Until then, the broader market is likely to remain vulnerable to further volatility and corrective moves.
