The Indian stock market is set for a positive opening on Tuesday, May 21, with the benchmark indices Sensex and Nifty 50 likely to benefit from mixed global market signals. Early indications from the Gift Nifty suggest a robust start, with the index trading around the 22,610 level, which is a premium of nearly 70 points from the previous close of the Nifty futures.
Previous Session Highlights
In the special trading session held on Saturday, the domestic equity indices recorded minor gains. The Sensex climbed 88.91 points, or 0.12%, closing at 74,005.94, while the Nifty 50 rose 35.90 points, or 0.16%, to settle at 22,502.00. The markets were closed on Monday due to the Lok Sabha elections in Mumbai.
Nifty 50 Outlook
Nifty 50’s performance in the special trading session suggested continued upside momentum within a range-bound action. The formation of a small range candle on the daily chart indicates an uptrend continuation pattern. According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, a bullish candlestick pattern like the Piercing line has emerged on the Nifty weekly chart, indicating a potential move towards 22,800 levels in the coming weeks.
Rupak De, Senior Technical Analyst at LKP Securities, notes that the Nifty remains within a channel, closing above 22,500 for the first time in several days. He suggests that traders should be cautious in the initial trading hour to confirm any directional moves, with key support at 22,400 and potential upward targets of 22,600 and beyond.
V.L.A. Ambala, Co-founder of Stock Market Today (SMT), highlighted mixed sentiments in Nifty’s technical indicators. She expects the key levels for the next rally to range between 22,650 and 22,350, with a potential 4-7% movement in the next month. Despite the overbought conditions, she advises a neutral trading strategy and investing in quality stocks, identifying support around 22,450 and 22,380, and resistance between 22,520 and 22,600.
Bank Nifty Outlook
The Bank Nifty index closed 84 points higher at 48,199 in the last session, posting a weekly gain of 1.64%. Chandan Taparia, Head of Equity Derivatives and Technicals at MOFSL, pointed out that the Bank Nifty managed to hold its rising support trend line and reclaimed its 50-day exponential moving average (DEMA). The formation of a Pin bar pattern on the daily scale, with a long lower shadow, indicates buying interest at lower levels.
Taparia predicts that the index needs to maintain above the 47,777 zones to bounce towards 48,250 and then 48,500 zones, with support levels at 47,777 and 47,500.
As the Indian stock market opens on May 21, investors should watch for early confirmation of market direction. With positive cues from the Gift Nifty and strong technical patterns in both Nifty 50 and Bank Nifty, there is potential for upward movement. However, mixed signals and global market influences suggest cautious optimism, with key support and resistance levels playing a critical role in the day’s trading dynamics.
