The benchmark indices ended the last day of May series on a positive note. The BSE Sensex closed 186 points or 1.32% higher at 14,296. The Nifty shut at 4337 up 1.43% or 61 points higher. Among the broader indices ? the BSE Midcap Index was up 0.78% or 38 and the Smallcap Index went up 13 points or 0.24%. Buying was witnessed in shares of capital goods, metal, banking, oil & gas exploration and select power companies. Among the sectors, Realty, Metal, Bank and Capital Goods indices were the highest gainers, went up 43%?68%. Inflation for week?ended May 16 remained unchanged at 0.61% week?on?week. The May expiry has been a spectacular series for the Indian markets, has the benchmark indices have surged by 25% each in this month. Even after this sharp rise the bulls continue to hold the momentum on the higher side as there is lot of great action seen in the midcap & small cap stocks.

The outlook for the June series continues to remain optimistic has the markets have formed a strong base in the May series at 3710 levels and after that gave a solid rally of almost 22% upto 4510. The weekly chart of Nifty is clearly in the overbought territory as the RSI is at 74. Even if the markets are overstretched the undertone is very strong, as buying is visible at every lower level.

For tomorrow, support for nifty is at 4305?4270 and resistance is placed at 4360?4380. Fresh buying only if nifty maintains above 4380. At lower level buying is sensible in midcap and frontline stocks, but one should be very selective. We have seen huge buying in the PSU and private sector bank in today’s session and we believe that they may continue to show more strength going forward.

For the June series we recommend to stay long on Nifty future with a stop?loss of 4290. If this level gets breached then we could see a sell?off and nifty can touch 4150?4100. On the higher side 4350?4400 is a major selling region, so keep a close watch around this zone.