After a period of consolidation, the Indian stock market is at a crucial juncture, poised for a directional move in the coming week of June 2nd to June 6th, 2025. Both the Nifty and Sensex have been trading within a defined range, and a breakout or breakdown from these levels will likely dictate the market's trajectory.

Nifty Technical Outlook

The Nifty 50 closed at 24,750.70 on May 30, 2025, experiencing a minor weekly loss. Technical analysis suggests a consolidation phase, with the index trading between 24,600 and 25,050. A decisive move above 24,900 could propel the Nifty towards 25,200-25,600. Conversely, 24,600 remains a strong support level, with further buying expected near 24,400.

Several analysts suggest that maintaining levels above the 20-day exponential moving average (DEMA), around 24,600, is crucial for a positive outlook. A breach of this level could trigger profit booking, potentially dragging the index down to 24,200. A strong close above 25,200, on the other hand, could reignite bullish momentum and pave the way towards 25,600 and beyond.

Momentum indicators are showing signs of fatigue due to the sideways movement of the index in the past few trading sessions. The daily Relative Strength Index (RSI) is wobbling below the 60 mark, indicating thinning energy reserves.

Sensex Technical Outlook

On May 30, 2025, the BSE Sensex closed at 81,451.01, down by 182.01 points. The Sensex, like the Nifty, has been consolidating within a range. Short term technical analysis indicates support at 78000 and resistance at 82500. A sustained move beyond either of these levels is needed to establish a clearer trend.

Trading Strategy and Key Calls

Given the current market scenario, a range-bound trading strategy with a slightly bullish bias appears prudent for the coming week.

• Nifty:
  • Support: 24,600-24,400
  • Resistance: 25,000-25,200
  • Strategy: Consider buying on dips near the support levels and trailing profits above 24,900. A decisive breakout above 25,200 or a breakdown below 24,600 should serve as a trigger for a more directional approach.
• Sensex:
  • Support: 80,886/80,561
  • Resistance: 81,938/82,263
  • Strategy: Similar to Nifty, a buy-on-dips strategy can be employed while keeping a close watch on the key support and resistance levels.

Sectoral View

Banking and financial services are expected to remain favorable sectors. The banking index, in particular, is seen as a key to unlocking further market momentum. A breakout above 56,000 in the Bank Nifty could potentially propel the index towards 57,500. Public sector banks are expected to show strength in the near term. Conversely, FMCG and IT sectors may remain subdued. Selling pressure was evident across sectors, with weakness in IT, auto, pharma, metals, and FMCG.

Other Factors to Watch

• Global Cues: Keep an eye on global cues, including US trade tensions, China's PMI, and the US PCE index.
• RBI Policy Meet: The upcoming RBI policy meet will be a crucial event to watch.
• India's Q1 GDP Growth Rate: India's Q1 GDP growth rate, announced on May 31st, 2025, will provide a snapshot of the economy's performance and could set the tone for market direction in the near term.
• FII and DII Activity: Sustained institutional activity may continue to boost overall investor confidence.
• Technical Indicators: Monitor technical indicators such as RSI, MACD, and moving averages to gauge market momentum and potential trend reversals.

Disclaimer: The views and recommendations provided are intended for informational purposes only and should not be construed as investment advice. Investors should consult with certified experts, consider their individual risk tolerance, and conduct thorough research before making any investment decisions. Market conditions are subject to rapid change, and individual circumstances may vary.