Indian Stock Market Prediction for Next Week, June 19–23, 2023: The Indian stock market has been showing resilience and strong momentum for the last few trading sessions. As a result, the benchmarks achieved new milestones by closing at new record highs on Friday. Despite the previous two weeks of consolidation, the last week has been a standout in terms of closings and returns.
Though the BSE Sensex and NSE Nifty 50 continued their strong upward momentum, the Bank Nifty struggled a lot to maintain its grip. Nevertheless, Bank Nifty couldn’t provide a positive chart structure on a weekly basis.
Throughout the week, benchmarks saw significant growth, with gains of 1.21 to 1.41 percent. On the other hand, the Nifty Bank index declined slightly by 0.12% during the week.
The NIFTY Smallcap 100 and NIFTY Midcap 100 indices performed even better, surging by nearly 3% each.
Nifty Realty and Nifty Consumer Durables stood out with impressive gains of 3.74% and 3.35%, respectively. Nifty Realty got close to its 52-week high of 527.15 points.
So, currently, with the positive global cues, the Indian market may extend the rally. But one has to be very cautious due to the divergence between Nifty and Bank Nifty.
Indian Stock Market Prediction for Next Week(19th to 23rd June, 2023)
Nifty Prediction for Next Week(19th June to 23rd June 2023)
Currently, the charts of the Nifty are more convincing than those of the Bank Nifty. In multiple time frames, Nifty has exhibited its true strength and positive price actions for an uptrend. The hourly, daily, and weekly charts all indicate a bullish structure with positive leading and lagging indicators.
Currently, zones 18700–18660 will act as a strong support area based on multiple time frames. It means that as long as the spot Nifty trades above this area, the overall structure will be bullish for next week. Only trading and sustaining below this area will bring bearishness for next week. Only the closing basis level will be considered for trend reversal.
As the Nifty is approaching the record high, on the upside, the immediate resistance will be exactly the previous lifetime high at 18887.6. Breaking this level will push the Nifty into uncharted territory for a fresh rally above 19000.
The upside targets for Nifty will be 19100–19300 in the best-case scenario, and the stop loss will be 18700–18660 on a closing basis, as mentioned earlier. Though there must be support from the Fiis and Diis, there must also be support from the global markets.
If Nifty breaks the range of 18700–18660 and closes below it, the downside targets for Nifty will be 18450, 18300, and 18180. So, in this scenario, one must keep the stop loss above 18740 on a closing basis.
Nifty Support and Resistance Levels:
- Pivot: 18,750.15
- Resistance 1: 18,940.55
- Resistance 2: 19,055.1
- Resistance 3: 19,245.5
- Support 1: 18,635.6
- Support 2: 18,445.2
- Support 3: 18,330.65
Bank Nifty Prediction for Next Week(19th June to 23rd June 2023)
The setup of Bank Nifty is looking weaker than Nifty, though Bank Nifty bounced sharply on Friday from the key support area of 43400. The overall structure of Bank Nifty in multiple time frames is not as convincing as Nifty’s. The areas 43400–43350 and 44050–44150 will be significant on the downside and upside, respectively. Any side that is broken will allow for more downward and upward price momentum.
The Bank Nifty will face immediate hurdles at 44050–44150, from where it declined several times in the previous week. The potential upside targets for the Bank Nifty will be 44200, 44370, and 44600. To enjoy this bull trade, the optimum stop loss should be below 43700 on a closing basis.
On the downside, the major support area will be at 43800–43670. Below this level, Bank Nifty can hit targets at 43500, 43350, and 43100. To execute this trade, one can keep a stop loss above 43800 on a closing basis.
Looking at the rounding top formation in the daily and weekly charts of the Bank Nifty, bulls will have to work very hard to maintain positive momentum above 44000.
Bank Nifty Support and Resistance Levels:
- Pivot: 43849.33
- Resistance 1: 44301.17
- Resistance 2: 44664.23
- Resistance 3: 45116.07
- Support 1: 43486.27
- Support 2: 43034.43
- Support 3: 42671.37
Macroeconomic Factors of This Week
- Monsoon Update: The progress of the monsoon season in India will be closely monitored this week. Any updates regarding the monsoon’s arrival, distribution, or potential delays can influence market sentiment. Especially the risk of the El-Nino still looming as per the report from The Bureau of Meteorology (BOM), Australia.
- Crude Oil Prices: The price of crude oil will be a key factor to watch this week. Any significant fluctuations in global oil prices on the upside can impact the overall market.
- USD/INR Rate: The exchange rate between the US dollar (USD) and the Indian rupee (INR) will be closely monitored as it affects various aspects of the Indian economy. The market will watch whether it will trade above 82 or 81.5 this week.
- FII Inflows: Foreign Institutional Investor (FII) inflows into the Indian equity market will be an important factor to track this week. Any notable changes in FII inflows can influence market movements.
U.S. Market This Week:
- Shortened Trading Week: The U.S. markets will be closed on Monday for the Juneteenth holiday.
- Housing Market Confidence: The NAHB Housing Market Index will reveal homebuilders’ confidence levels, which have been gradually recovering this year after a slowdown in 2022 due to rising mortgage rates.
- Housing Market Updates: The U.S. Census Bureau will release a report on housing starts and building permits for May on Tuesday.
- Federal Reserve Chair Testimony: On Wednesday and Thursday, Federal Reserve Chair Jerome Powell will testify before Congress as part of his semiannual testimony on monetary policy. This comes after the recent FOMC meeting, where interest rates were held steady, and the dot plot suggests potential rate hikes if inflation remains high.
- S&P Global PMI: On Friday, S&P Global will release its Purchasing Managers’ Index (PMI) reading for June, providing insights into the health of the manufacturing sector.
- Earnings Reports: Several companies, including FedEx, Accenture, Darden Restaurants, and BlackBerry, are scheduled to report their earnings, offering valuable information on their financial performance.
Conclusion
The recent surge in the Indian stock market can be attributed to the market’s anticipation of a global slowdown in inflation and the possibility of central banks refraining from raising interest rates. Analysts are predicting significant passive investments of around $150-$200 million into India’s stock market through FTSE rebalancing. These factors have provided strong reasons for the Indian market to continue its upward trajectory this week.
However, for the market rally to sustain and reach new heights, it will be crucial for Bank Nifty to lead from the front. The banking sector’s performance will play a pivotal role in determining the market’s direction. Without strong leadership from Bank Nifty, there may be a temporary pause or even a reversal of the upward trend in the market this week.
Additionally, the lack of clear positions in the futures and options (F&O) market, particularly when the market is at an all-time high, raises the possibility of profit bookings. Traders and investors may take this opportunity to secure their gains, potentially leading to short-term volatility.
Please note that all levels of Nifty and Bank Nifty discussed above, are spot prices.
Chart Credit: Chartink
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