The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open on a muted note Wednesday tracking weakness in global markets.
The trends on Gift Nifty also indicate a mildly negative start for the Indian benchmark index. The Gift Nifty was trading around 24,686 level, a discount of nearly 20 points from the Nifty futures’ previous close.
On Tuesday, the domestic equity market indices ended half a percent higher each, with the Nifty 50 closing near 24,700 level.
The Sensex surged 378.18 points, or 0.47%, to close at 80,802.86, while the Nifty 50 settled 126.20 points, or 0.51%, higher at 24,698.85.
Nifty 50 formed a small positive candle on the daily chart with minor upper shadow.
“Currently, Nifty is in an attempt to break above the crucial opening downside gap of 5th August around 24,686 levels and closed slightly above it. This is a positive indication. The underlying trend of Nifty remains positive,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
According to Shetti, a sustainable move above the hurdle of 24,700 levels could open the next upside target of 25,000 - 25,100 in the near term.
Here’s what to expect from Nifty 50 and Bank Nifty today:
The analysis of Nifty open Interest (OI) data showed the highest OI on the call side at the 24,900 and 25,000 strike prices, while on the put side, it was concentrated at the 24,500 strike price, said Mandar Bhojane, Equity Research Analyst at Choice Broking.
Nifty 50 continued its upward journey on August 20 and closed the day higher by 126 points near the 24,700 level.
“The Nifty 50 moved above 24,700 after sustaining above 24,600. The trend is likely to remain strong as long as it stays above the 24,600 - 24,650 range. A decisive fall below 24,600 might trigger a reversal of the current uptrend,” said Rupak De, Senior Technical Analyst, LKP Securities.
On the higher end, he believes the Nifty might move towards 24,840 - 24,860.
VLA Ambala, Co-Founder of Stock Market Today noted that Nifty 50 formed a green Doji candlestick pattern with a 130-point gain on the daily timeline above its 20-day and 50-day EMAs.
“If the index stays above the latest session’s high, it could reach the 25,000 level in the next 10 days. However, with a PE ratio of 22.80 and a monthly RSI of 78, short-term investors should be cautious and avoid aggressive buying. Instead, they should look for opportunities to accumulate high-quality stocks with financial strength,” Ambala said.
Looking at the market situation, she expects the immediate support for Nifty between 26,640 and 24,500 in the next session, while resistance between 24,770 and 24,810.
Bank Nifty index rallied 435 points, or 0.86%, to close at 50,803 on Tuesday, forming a bullish candlestick pattern on the daily timeframe.
“Nifty Bank index has ended the session right around the resistance zone of 50,800 - 51,000, and hence the follow up move will be important for the near term trend. The index has formed a support base around 49,650 and as the RSI readings are positive, one should avoid any contra trades and look for stock specific buying opportunities here,” said Ruchit Jain, Lead Research, 5paisa.com.
According to him, a sustained move above 51,000 could lead to an upmove towards 52,400 soon. Bank Nifty support is seen at 50,120 - 49,830 level, while the resistance is placed at 51,370 - 51,700 levels.
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