Budget 2024 | D-Street experts predict ‘heightened volatility’, suggest caution on profit-booking if Nifty hits 25K

Budget 2024: D-Street veterans and several brokerages have predicted that the upcoming Union Budget 2024 might bring volatility in the Indian stock market after the sentiment has turned bullish since June-end. The return of foreign fund inflows resumed in Indian markets and as investors priced in stability with the Bharatiya Janata Party (BJP)'s return to power post the Lok Sabha elections.

Finance Minister Nirmala Sitharaman is set to unveil the newly elected Modi 3.0 government's first Union Budget on June 23. Most industry experts anticipate income tax relief for salaried employees, however, D-Street analysts expect no major upswings in indices over policy announcements.

Also Read: Budget 2024: L&T to Oil India, D-Street expert suggest four stocks ahead of Modi 3.0’s first Union Budget

In the 26 sessions since the start of June, Nifty has notched record closing highs 15 times, one more than the Sensex. In that period, Nifty 50 gained 8.44 per cent, hitting an all-time high 16 times, as Lok Sabha election results ensured policy continuity and forecasts of stronger economic growth for 2024.

Earlier today, Nifty 50 hit its fresh all-time high of 24,443.60 while the Sensex made a fresh peak of 80,397.17 during the session. The 30-share BSE benchmark hit the psychological 80,000-mark last week in its fastest-ever 10,000 bull-run.

As investors would be interested in understanding the trading strategy ahead of the much-anticipated Budget 2024, D-Street experts discuss important market levels and the investing approach to adopt ahead of the budget session.

Budget Trading Strategy: Nifty 50/Sensex levels ahead of June 23

Santosh Meena, Head of Research, Swastika Investmart Ltd:

Nifty and Sensex are heading into the budget with strong bullish momentum. However, most momentum indicators suggest an overbought situation. Despite this, the market may remain overbought for some time.

The immediate and minor hurdles are at 24,500 for the Nifty and 81,000 for the Sensex, with 25,000 being a key psychological level for the Nifty where profit booking can be expected. On the downside, 24,000 for the Nifty and 78,500 for the Sensex, coinciding with a rising 20-DMA, will serve as key support levels. The next major support levels are 23,300 for the Nifty and 77,000 for the Sensex.

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Vishnu Kant Upadhyay, Assistant Vice President - Research and Advisory at Master Capital Services Ltd:

The key benchmark indices are expected to maintain a positive trajectory. For the Nifty50, support levels are anticipated near 24,050 and 23,850. In the case of the Sensex, immediate support is situated at 79,100. A decisive break below this level could drive prices down further to 78,500.

On the upside, the Nifty50 faces resistance at 24,650 and 24,800, while the Sensex is likely to encounter resistance at 81,000 and subsequently at 81,800. Most key technical indicators are signaling a positive trend.

The Nifty 50 and the Sensex are trading above their short-term moving averages, specifically the 10-day and 21-day exponential moving averages (EMAs). Additionally, the MACD indicator is also displaying a positive trajectory.

Budget Trading Strategy: What approach should traders adopt ahead of the budget session?

‘’The market may become volatile near the budget, with stock and sector-specific factors coming into play. Traders are advised to ride the momentum with a cautious approach,'' added Swastika Investmart's Santosh Meena.

Vishnu Kant Upadhyay of Master Capital Services said that undoubtedly, there will be heightened volatility ahead of the budget. ‘’Initial market sentiments are bullish, suggesting that buying at lower levels could be beneficial. Any decline near the support levels is likely to present fresh buying opportunities,'' said Upadhyay.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.