Indian stock market benchmark indices, Sensex and Nifty 50, are likely to see a strong opening on Tuesday tracking gains in global markets.
The trends on Gift Nifty also indicate a positive start for the Indian benchmark index. The Gift Nifty was trading around 24,655 level, a premium of nearly 65 points from the Nifty futures’ previous close.
On Monday, the domestic equity market indices ended flat amid profit booking at higher levels.
The Sensex eased 12.16 points to close at 80,424.68, while the Nifty 50 settled 31.50 points, or 0.13%, to close at 24,572.65.
Nifty 50 formed a small negative candle on the daily chart with minor lower shadow.
“Technically, this pattern indicates consolidation movement post decisive upside breakout of Friday. Nifty is currently placed at the hurdle of the upper area of previous down gap of 5th August at 24,685 levels,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
He believes the short-term trend of Nifty continues to be positive. Having placed at the key overhead resistance around 24,700, there is a possibility of some more consolidation or minor dip in the next 1-2 sessions, before showing another round of upside breakout, he added.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty 50 index took breather on August 19 with range bound action and closed the day higher by 31 points.
“The Nifty remained rangebound throughout the day, appearing to pause before the next rally. The index closed above the recent consolidation for the second consecutive day. The trend likely favors the bulls as long as it stays above 24,300,” said Rupak De, Senior Technical Analyst, LKP Securities.
On the higher end, he believes the Nifty might move higher with resistances placed at 24,750 - 24,800.
VLA Ambala, Co-Founder of Stock Market Today noted that the Nifty 50 is trading above the 20-day EMA (Exponential Moving Average) on the daily chart and is around 13% away from its 20-month EMA.
“Moreover, Nifty is only 2% away from its all-time and monthly highs, and I would suggest that all investors be cautious. The Nifty index RSI stands at 55 daily, 70 weekly, and 77 monthly on the daily chart, indicating an overbought condition on the higher timeframes. However, I would suggest to all the intraday traders that this might offer opportunities to buy on dips,” Ambala said.
Looking ahead at the market situation, she expects immediate support for Nifty between 24,470 and 24,400 in the next session, while resistance is expected between 24,650 and 24,730.
Bank Nifty index remained choppy and ended with a loss of 149 points at 50,368 on Monday, forming a bearish candlestick pattern on the daily timeframe.
“Bank Nifty formed a small bearish candle on daily scale and is finding some pause near its 50 DEMA; however, multiple supports are intact at lower zones. Now it has to continue to hold above 50,250 zones for a bounce towards 50,750 then 51,000 levels while support is seen at 50,250 then 50,000 zones,” said Chandan Taparia, Head – Equity Derivatives and Technicals, Broking and Distribution, MOFSL.
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