Trade Setup for June 23: Nifty may face a setback as US attack on Iran could dampen sentiment

The benchmark Nifty 50 index staged a strong rebound on Friday, snapping a three-session losing streak amid buoyant cues from Asian markets and advancing US futures.

Despite a slightly lower start, the index quickly reversed course and maintained an upward trajectory throughout the session.

Investor sentiment was buoyed by US President Donald Trump's remarks suggesting that a decision on America’s potential involvement in the Israel-Iran conflict would be made within two weeks, providing temporary relief and calming geopolitical concerns.

The return of risk appetite was evident on Dalal Street, with broad-based buying across sectors. Bullish momentum drove both the Nifty 50 and Sensex over 1% higher for the day.

The Nifty closed above the 25,100 mark for the first time in six sessions, ending with a sharp gain of 319 points at 25,112. After an early bounce, the index sustained its momentum through the mid and latter part of the trading day, closing at the session's high.

Trent, Jio Finance, and M&M emerged as top performers on the Nifty. Conversely, Hero moto corp, Dr reddy, and Maruti concluded the session as major losers of Nifty.

For the week overall, the Nifty registered a commendable gain of 1.60%.

After Thursday's sharp decline, both Nifty Midcap and Smallcap Indices recouped some of the losses. The Nifty Midcap 100 Index rose by 1.46%, while the Nifty Smallcap 100 Index gained more than 1%.

The buying frenzy was broad-based, with all sectoral indices ending in the green. Amongst them, Realty, PSU Banks, Metal, and Auto sectors were the major outperformers, leading the charge from the front.

Meanwhile, foreign investors remained net buyers in the cash market on Friday, while domestic investors were net sellers.

Looking ahead, global cues will remain key, with investors eyeing US manufacturing and services PMI, and further developments on the geopolitical front. Markets may consolidate with bouts of volatility, said Siddhartha Khemka of Motilal Oswal.

According to Nagaraj Shetti of HDFC Securities, the underlying trend of Nifty is positive. The next upside levels to be watched around 25,250.

Shetti said that a decisive breakout of the range could pull Nifty towards the next upside target of 25,650 in the near term. Any consolidation or minor dips down to the immediate supports of 24,900 could be a buy-on-dips opportunity.

LKP Securities' Rupak De said the Nifty has reclaimed the 21-day EMA, which could provide further momentum for an upward move. Support is now placed at 24,850, and the index remains a ‘buy on dips’ as long as it holds above this level. On the higher side, it may continue advancing towards 25,350 and beyond.

Devarsh Vakil of HDFC Securities sees immediate resistance at 25,222 levels, while support at 24,900 levels.

The Nifty Bank index ended the session at 56,252.85, up 1.22%. The index broke above a short-term falling trendline, suggesting an end to the recent corrective phase and a likely resumption of the broader uptrend, said Om Mehra of SAMCO Securities.

"The support levels remain at 55,800, aligned with the 20 EMA. On the upside, resistance is placed at 56,700, followed by 57,050, which marks the all-time high," Mehra added.

Note To Readers

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.