Trade setup for Thursday: 15 things to know before opening bell
The market has broken the support around 22,800 (which coincides with the previous record high of May 3 as well as the 23.60 percent Fibonacci retracement level from the current month’s low to the record high) on the Nifty 50 after a gap-down opening and closed lower for four days in a row on May 29. Market participants may be more cautious ahead of the expiry of May derivative contracts on Thursday, and the exit polls scheduled immediately after the seventh phase of the Lok Sabha election on June 1.
According to experts, the next support for the index lies around 22,600, which coincides with the 38.2 percent Fibonacci retracement level, followed by 22,500, coinciding with the 20-day SMA or the mid of the Bollinger Band. As long as the index holds these support lines, the possibility of a rebound seems high in the coming sessions, with crucial resistance at the 23,000 mark.
The Nifty 50 declined 183.5 points, or 0.80 percent, to close at 22,705, reporting a bearish candlestick pattern on the daily charts with an upper shadow.
Meanwhile, the Bank Nifty also saw a gap-down opening and lost a further 641 points, or 1.3 percent, to 48,501, forming a bearish candlestick pattern on the daily timeframe. Experts expect the possibility of a bounce back in the index, as after the recent fall,
it reached very close to the 20-day SMA (Simple Moving Average) as well as the 50 percent Fibonacci retracement level placed around the 48,300 mark. However, if it fails to rebound, the correction may extend to the 48,000 mark.