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Indian stocks demonstrated renewed vigor on 5 June as market participants positioned themselves ahead of the Reserve Bank of India’s (RBI’s) upcoming monetary policy announcement. With market sentiment buoyed by strength across Asian markets, investors directed their focus towards higher levels, and the benchmark Nifty 50 pushed past 24,700 thanks to robust performances from industry giants such as Reliance Industries and key private banking shares.

DHAMPUR: Buy at CMP and on dips to ₹138, stop ₹132, target ₹165-173

SAREGAMA: Buy at CMP and on dips to ₹542, stop ₹525, target ₹615-630

INDIAMART: Buy above ₹2,440 and on dips to ₹2,380, stop ₹2,360, target ₹2,590-2,660

Sensex gained 443.79 points (0.55%) to close at 81,442.04, while Nifty added 130.70 points (0.53%) to settle at 24,750.90. The rally extended beyond blue chips. The BSE Midcap index rose by 0.4%, and the BSE Smallcap index advanced by 0.65%. This broad-based uptrend reflects a market keen on capturing every opportunity in the build-up to the RBI monetary policy committee’s decision.

Volatility was the key feature of the market throughout the week and the market was whipped around quite a bit as global trends were the main drivers of sentiment. There really wasn’t much by way of local news flow to contain the volatility. The moves were also reasonably large, creating sufficient moves to bring people in – only to get knocked out the following day. Trading therefore was quite difficult through the week and few would have emerged unscathed.

Also read: IRCTC's Ebitda growth rate mirrors pace of a slow-moving train

A strong decline at the start of the week did dent confidence but the recovery that emerged swiftly from lower levels is signalling that the highs will once again be challenged. Attempts continue to emerge as the market tries to carve out a bullish possibility.

As we head into the last trading day of the week, we could experience some profit-booking as we are not nearing an important inflexion zone. However, the trends are still circumspect and are witnessing limited market participation. Nifty now seeks to contest resistance around 25,000 while Nifty Bank aims to clear 56,000 to clear the air of uncertainty. Volatility is now part of the ever-changing market scenario as sentiment keeps changing. Risk management is critical as the lack of clarity is greater than ever.

Also read: KEC is making amends to repair margin, allay debt concerns

For Nifty to stage an upmove the spot needs to move above 24,800, which acts as a big hurdle for a bullish revival. With the open interest data clearly indicating a revival, one should keep tracking a 30-minute range breakout on Friday as this continues to be an important metric for creating some longs. As the indices are not showing much decline, one should look to encash some stock-specific action.

Buy at CMP and on dips to ₹138, stop ₹132, target ₹165-173

Buy at CMP and on dips to ₹542, stop ₹525, target ₹615-630

Also read | PMI: India's services exports bump may lose steam amid global economic gloom

Buy above ₹2,440 and on dips to ₹2,380, stop ₹2,360, target ₹2,590-2,660

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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