Trade Setup For July 1: Equities Poised for Further Gains? Nifty Nears Key Resistance

The Indian equity market is looking bullish as we head into July. The Nifty 50 has been steadily climbing, and the index is now knocking on the door of a crucial resistance level. Will it break through and continue its upward journey? Let’s dive into the technicals and see what the charts are saying.

Nifty 50: A Technical Look

The Nifty 50 has been on a tear lately, gaining over 4% in the month of June. The index closed at 19,471.75 on June 30th, just shy of the key resistance level at 19,500.

Here’s what’s interesting:

• The index has been consistently trading above its 20-day and 50-day moving averages, indicating strong bullish momentum.

• The relative strength index (RSI) is hovering around the overbought territory, suggesting that the market might be due for a short-term correction. However, it’s important to note that the RSI has stayed above 70 for several weeks, indicating continued bullish sentiment.

• The Nifty 50 has already breached the previous resistance levels of 19,000 and 19,200, which is a positive sign for bulls.

Key Levels to Watch:

• Resistance: 19,500, 19,700

• Support: 19,200, 19,000

What This Means for Traders:

• Bullish Traders: If the Nifty 50 manages to break through the 19,500 resistance level, it could signal further upside potential. Traders could look for long positions with a stop-loss below the 19,200 level.

• Bearish Traders: While the overall trend is bullish, the RSI indicates potential for a short-term correction. Traders could look for short positions if the Nifty 50 fails to break through 19,500 and pulls back towards the 19,200 support level.

Remember:

• These are just technical observations, not financial advice. Always do your own research and consult with a financial advisor before making any investment decisions.

• Market movements can be unpredictable. Keep a close eye on the news and economic indicators for potential shifts in the market sentiment.

It’s an exciting time for the Indian equity market. The Nifty 50 is poised for further gains, but the key resistance level at 19,500 will be crucial to watch. The next few days will be critical for determining the future direction of the index.