Daily Market Report- 2nd June

The Indian stock market had a volatile day as Nifty opened with a gap and then closed flat, but now before making some violent moves on either side.

Daily Market Report- 2nd June

Yesterday, a bullish pattern emerged on the hourly timeframe as the market found support near the 18450 levels.

The Nifty started the day on a positive note, with a significant gap up of 63.10 pts (+0.34%), and Bank Nifty also commenced with a favourable start of 207.10 pts (+0.47%).

As discussed in yesterday's market review, Nifty respected the support levels and began the day on a positive note. Throughout the day, it traded between 18600 and 18500, as expected.

Stocks and more:

Stocks that opened today with significant Gap downs are given below:

After significant gaps, prices typically exhibit a tendency to revert back to their mean. If you are interested in profiting from this mean reversion behaviour, we have multiple data-backed strategies that provide entry and exit alerts on stocks that fit this criterion. You can visit the respective model details page on the app to delve into more specifics.

Regarding mean reversion strategies, Quick Short and Back Up are two models that work on this strategy. Back Up ended the day with a gain of +2.28%, while Quick Short took a break today as it didn’t meet quantitative metrics under the current market conditions.

Back Up:

Model NAV:

Nifty’s Technicals & Data Points:

Technical Points:

  1. The price is currently encountering resistance at the sloping trendline, while support is found at the 18450 level. As the price consolidates within a narrow range, a breakout in either direction, upward or downward, will likely result in a notable and significant movement.
  2. The EMA is now moving horizontally, which means that the price is not showing any clear upward or downward trend at the moment.

Data Points:

  1. For the 8th June expiry, the highest OI of CE is at 18600, and PE is at 18500. It is anticipated that OI shifts will commence in the upcoming week.
  2. At the 18500 levels, an almost equal amount of CE and PE writing is evident. Any notable unwinding observed at these levels has the potential to pave the path towards further market movement.

Levels worth monitoring tomorrow:

If the price continues to stay within the trending sloping and support levels, we consider the market to be in a sideways phase. However, any substantial movement will likely occur following a breakout, either to the upside or downside. Additionally, the OI data suggests a sideways trend, with OI shifts anticipated in the forthcoming week.

We would love to know your thoughts on the following: Do you think the sloping resistance line will break in the Nifty?  

Disclaimer: The opinions expressed in this section are personal views and should not be considered financial advice. Please do your own research and consult with a professional before making any investment decisions.