Indian stock market indices, Sensex and Nifty 50, are likely to open lower on Monday following weakness in global peers.
The trends on Gift Nifty also indicate a negative start for the Indian benchmark index. The Gift Nifty was trading around 24,380 level, a discount of nearly 155 points from the Nifty futures’ previous close.
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On Friday, the domestic equity market indices plunged a percent each amid selling across the board.
The Sensex crashed 738.81 points, or 0.91%, to close at 80,604.65, while the Nifty 50 settled 269.95 points, or 1.09%, lower at 24,530.90.
Nifty 50 formed a long bear candle on the daily chart that has engulfed the previous long bull candle of Thursday.
“Technically, this pattern indicates a formation of a bearish engulfing pattern. Normally, formation of such bearish engulfing after a reasonable upside is considered as a top reversal pattern. Hence, one may expect follow-through weakness in the short term,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
Nifty 50 on the weekly chart formed a small negative candle with a long upper shadow. This candle pattern could be considered as a part of shooting star type pattern. However, a confirmation of shooting star signals crucial trend reversal for the markets, he added.
Shetti believes the short-term trend of Nifty seems to have reversed from the all-time highs and the formation of candle pattern as per daily and weekly indicates possibility of more weakness in the market ahead.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty 50 Prediction
Nifty 50 witnessed a decisive selloff on July 19 and closed the day lower by 269 points.
“On the daily chart, the Nifty has formed a bearish engulfing pattern, suggesting a possible bearish reversal in the market. The RSI is showing negative divergence, indicating a shift in price momentum. Additionally, the daily RSI has entered a bearish crossover and is emerging from the overbought zone,” said Rupak De, Senior Technical Analyst, LKP Securities.
On the lower end, support is placed at 24,500, below which the index might drift down to 24,400 – 24,200, and on the higher end, resistance is placed at 24,650 – 24,700, he added.
For someone looking for a very short-term or swing purpose, VLA Ambala, Co-Founder of Stock Market Today suggests they go with the cautious approach; however, mid to long-term investors should watch discounted stocks or wait for a dip in the benchmark index before they decorate or average press positions in the market.
“Nifty indicates a Downward Shooting Star on the weekly chart while indicating potential resistance, and by analyzing the market there might be a rise in the sell range from 24,920 to 24,890 in the next 2-3 days forming a Bearish candlestick pattern,” Ambala said.
Considering these aspects, she expects the benchmark index Nifty to gain support between 24,480 and 24,350, and meet some resistance between 25,625 and 24,700.
Bank Nifty Prediction
Bank Nifty declined 355 points or 0.67%, to close at 52,266 on Friday, forming a bearish candlestick pattern on the daily charts.
“Bank Nifty closed at its day’s low, forming a bearish candlestick on the daily chart. The active call writing and put covering suggest weaker sentiment. Traders should maintain a sell-on-rise strategy, with resistance at 52,500. Bullish positions are recommended only if the index closes above 52,500. Further weakness is expected if it closes below its 21-day EMA at 52,000,” De said.
Meanwhile, according to Ambala, Bank Nifty can expect the support levels at 51,950 and 51,650, and resistance can lie between 52,470, 52,710, and 52,850 in the next market session.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
