Trade Setup for June 16: Israel-Iran Conflict Continues to Cloud Nifty Outlook
Nifty faces pressure from Israel-Iran conflict and rising oil prices; key support at 24,450 and resistance near 25,000. Cautious trading advised Monday.
image for illustrative purpose
The Nifty closed the week on a lower note after two consecutive days of losses, weighed down by a mix of weekly expiry volatility and escalating geopolitical tensions. Israel’s recent attacks on Iran triggered a sharp reaction in global markets last Friday. With Iran’s retaliatory moves over the weekend and further involvement from other nations, the conflict shows no signs of de-escalation, keeping investor nerves on edge.
Despite the turmoil, the bulls managed to defend the crucial swing low of 24,462—last touched on May 22—recovering approximately 250 points from intraday lows on Friday. While this showed resilience, the ongoing conflict in West Asia raises doubts about how long this support can hold.
Although India is not directly involved, the indirect effects are evident. Brent Crude futures surged nearly 13%, approaching $80 per barrel after hovering around $60 recently. Rising oil prices threaten to increase India’s import bill and inflation, potentially undermining recent monetary policy measures taken by the Reserve Bank of India.
Markets worldwide reflected these tensions. Wall Street’s Dow Jones shed over 700 points on Friday, just as major indices neared record highs. The risk-off sentiment also boosted demand for safe-haven assets like bonds and gold.
Domestic headwinds included the Nifty Bank index, which has fallen for four consecutive sessions, erasing gains made since the RBI’s June 6 policy announcement. The Nifty Bank has corrected over 1,500 points from its recent peak of 57,049 and now faces critical support near 55,500 and 55,000.
Market experts suggest the Nifty remains range-bound between 24,500 and 25,200. Rajesh Bhosale of Angel One highlights the 24,400–24,450 zone, alongside the 50-day moving average, as vital support levels. On the upside, closing the gap between 24,825 and reclaiming 25,000 is crucial for a bullish turnaround. Bhosale advises a cautious “wait-and-watch” approach amid ongoing uncertainty.
Vaishali Parekh from Prabhudas Lilladher echoes this sentiment, emphasizing 24,000 as a key support level to maintain the broader trend, while a decisive break above 25,000 is needed to improve market bias.
HDFC Securities’ Nandish Shah notes the importance of the 24,462 level, warning that a break below could intensify selling pressure toward 24,164. Resistance on the upside is marked at 24,847 and 24,936.
According to Om Mehra of SAMCO Securities, the Nifty Bank’s support at 55,000 is a key psychological barrier. Falling below this could trigger further declines, while a sustained close above 56,000 is necessary to reignite bullish momentum.
As the Israel-Iran conflict continues to unfold, traders are advised to stay alert and watch for fresh developments that could impact market direction when trading resumes on Monday.
