Navigating Market Trends: Insights for May 10th, 2024

Navigating Market Trends: Insights for May 10th, 2024

Nifty Outlook:

Yesterday, the Nifty May futures closed at 22075, exactly as predicted in my previous journal entry. Today, early indicators suggest a gap up of 70 to 75 points. Despite positive movements in US markets and Asia, including a slight rise due to expectations of a rate cut following weaker job data, I anticipate challenges for the Indian market. Even with the green opening, I don’t foresee sustainability above 22150 to 22200. Instead, there might be a downward trend towards testing the 100-day EMA of 21800, particularly post-lunch and near market closing, given the upcoming weekend.

BankNifty Outlook:

In line with my previous observations, BankNifty tested the lower level of 48000 but plunged further, breaching the 50EMA and closing at a day low of 47669. This indicates market weakness, likely due to heavy selling by Foreign Institutional Investors (FIIs), despite favorable Indian fundamentals and consistent buying from Domestic Institutional Investors (DIIs). Recovery may take time, with the market expected to remain subdued until the election results on June 4th. While today’s market may open on a positive note, it could dip to test the option writers’ zone of 47000 before potentially recovering in the second half, closing around 47500.

As I prepare for today’s trading session, I analyze the market dynamics with caution, mindful of the various factors influencing price movements. Stay tuned for further updates as the day progresses.