Trade Setup for June 23: Nifty Outlook Cautious Amid US-Iran Tensions, Buy-on-Dips Still in Play

The Indian equity markets wrapped up the previous week on a strong note, but fresh geopolitical developments—specifically the US airstrikes on Iran—may cast a shadow over the Nifty's momentum as markets reopen on Monday, June 23.

Despite a slightly muted opening last Friday, the Nifty 50 index staged a sharp rebound, snapping a three-day losing streak. Buoyant cues from Asian markets and advancing US futures helped fuel investor optimism. The Nifty surged 319 points to close at 25,112, marking its highest closing in six sessions with gains of over 1.2%.

Geopolitical Overhang May Limit Gains

Market sentiment had briefly improved following US President Donald Trump's statement that a formal decision on America's role in the Israel-Iran conflict would come within two weeks. This provided a temporary sense of relief, encouraging investors to re-enter risk assets. However, the recent US attack on Iranian nuclear sites may dampen sentiment, introducing volatility in the short term.

Weekly Gains & Sectoral Performance

For the week, the Nifty posted a 1.60% gain, with broad-based buying witnessed across sectors:

Top Sectoral Performers: Realty, PSU Banks, Metals, and Auto

Top Gainers: Trent, Jio Financial, and M&M

Top Losers: Hero MotoCorp, Dr. Reddy’s, and Maruti

Midcap and Smallcap indices also recovered from Thursday’s decline:

Nifty Midcap 100: +1.46%

Nifty Smallcap 100: +1.12%

Technical Outlook: Buy-on-Dips Remains Valid

According to Nagaraj Shetti of HDFC Securities, the underlying trend for the Nifty remains bullish. A decisive move above 25,250 could potentially trigger a rally towards 25,650 in the near term. Shetti adds that dips toward 24,900 present a “buy-on-dips” opportunity.

Rupak De of LKP Securities echoed a similar view, stating that the Nifty has reclaimed its 21-day EMA, providing momentum for further gains. He sees support at 24,850, while resistance lies at 25,350.

Devarsh Vakil of HDFC Securities pointed to resistance at 25,222, while maintaining 24,900 as a strong support level.

Bank Nifty Analysis

The Bank Nifty index climbed 1.22% to close at 56,252.85, breaking above a short-term falling trendline. According to Om Mehra of SAMCO Securities, this move may indicate the end of the recent corrective phase and the resumption of the broader uptrend.

Support: 55,800 (aligned with 20 EMA)

Resistance: 56,700 and 57,050 (all-time high)

Key Levels to Watch on June 23

Index Support Zone Resistance Zone

Nifty 50 24,850 – 24,900 25,250 – 25,350

Bank Nifty 55,800 56,700 – 57,050

Conclusion

While global cues and geopolitical uncertainties may introduce short-term volatility, the underlying structure remains constructive. Analysts continue to advise a buy-on-dips approach as long as key support levels are held. Market participants should keep an eye on global macro data, especially US manufacturing and services PMI, as well as updates from the Middle East.