Stock Market Update for June 11, 2021: A Bullish Outlook Amidst Short-Term Corrections
Introduction: The stock market experienced a sharp decline on June 11, 2021, marking a significant gap down. However, this drop seems more aligned with normal profit booking activities as the market nears its all-time high. Despite the Federal Reserve's interest rate hike, my perspective remains bullish, and I predict the NIFTY index might reach the 16,000 mark in the upcoming weeks, barring any negative news that could disrupt the trend.
Market Overview and Analysis
NIFTY Analysis: The NIFTY index formed a broad wedge pattern in the 1-hour timeframe, signaling a potential breakout in either direction. On the downside, 15,500 is expected to act as a strong support level.
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A significant point to consider is that the market might consolidate negatively on June 16, 2021, due to the DOJI candle formed the previous day. However, the NIFTY Bank sector appears to be performing better than NIFTY as a whole. A breakout above 35,500 could push banking stocks higher, potentially leading the broader index to regain momentum.
Short-term buyers can consider entering the market if the index remains above 15,800, which was the closing level of NIFTY for the previous trading day. rallies are likely if the bulls manage to hold this level, driving the index towards the 16,000 mark.
Technical Breakdown
Further technical support for the NIFTY is observed in the 15-minutes timeframe, where a broad wedge pattern has been formed. The upper trendline acts as resistance, while the lower trendline serves as support. A breakout from this pattern would signal a one-sided momentum.
A strong support level at 15,730 is anticipated, providing a buffer against further declines.
Given these factors, the overall outlook for the week remains bullish, with the underlying trend being driven by optimism and positive sentiment. While daily fluctuations can be expected, especially due to events like FO expiries, the underlying bull market is likely to continue.
Disclaimer: This analysis should not be taken as a buy or sell recommendation. Please consult with your financial advisor before making any investment decisions.
Conclusion
Despite the short-term corrections, the broader market remains bullish, with significant potential for gains in the coming weeks. The technical pattern supports this view, and investors should remain vigilant but proactive in their trading strategies, especially as the market approaches its all-time highs.
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