Indian stock market indices, Sensex and Nifty 50, are likely to open on a tepid note on Friday tracking mixed sentiment in global markets.
The trends on Gift Nifty also indicate a weak start for the Indian benchmark index. The Gift Nifty was trading around 25,090 level, a discount of nearly 30 points from the Nifty futures’ previous close.
On Thursday, the domestic equity market ended with minor gains amid strong global cues.
The Sensex rose 144.31 points to close at 81,611.41, while the Nifty 50 settled 16.50 points, or 0.07%, higher at 24,998.45.
Nifty 50 formed a small negative candle on the daily chart with minor upper shadow.
“Technically, this pattern indicates range bound action around 25,150 - 24,950 levels. The formation of long upper shadows indicates the emergence of weakness from near the hurdles. The double bottom formation in Nifty 50 around 24,700 is still not confirmed as the market is not sustaining with follow-through upside bounces. Any decline below the recent swing low of 24,700 levels could mean bearish lower top confirmation at 25,230 for short-term and that could change the underlying trend to negative,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
However, Shetti believes if Nifty manages to sustain above the resistance of 25,250 - 25,300 levels in the next 1-2 sessions, then a fresh round of up move could resume and that could possibly pull Nifty towards the next hurdle of 25,500 - 25,600 levels in the near term.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty 50 shifted into a consolidation with narrow range movement on October 10 and closed the day higher by 16 points.
“On the daily chart, the Nifty 50 index has been failing to reclaim 50-EMA (Exponential Moving Average) for the last two days, indicating prevailing weakness. On the lower end, support is placed at 24,950 – 24,900. A fall below 24,900 could trigger a correction toward 24,750 – 24,700. On the other hand, resistance is seen at 25,150, and a move above this level could push the index towards 25,350 – 25,400 in the short term,” said Rupak De, Senior Technical Analyst, LKP Securities.
Dr. Praveen Dwarakanath, Vice President of Hedged.in noted that the Nifty 50 formed an insider candle, indicating indecisiveness, and the rally during the day was sold-off, indicating weakness to continue in the index.
“ADX DI- line continues to trend downward, still not showing signs of a further fall, however, momentum indicators are hinting towards a fall in the index. Options writer’s data showed a short covering of 25,300 puts while an increase in call writing at 25,000 and above levels, indicating a sideways to downside bias in the index,” said Dwarakanath.
Meanwhile, given the current market conditions, VLA Ambala, Co-Founder of Stock Market Today recommends taking a neutral approach over the next few weeks until prices stabilize.
“Technically, Nifty ended the day at 24,998.45, forming a small red range Doji candlestick pattern on the daily timeframe. The index is currently trading below both the 20 and 50-day EMAs, making the bearish outlook very evident. Currently, the Nifty RSI level is 42 on daily, 59 on weekly, and 75 on monthly timeframe, indicating that traders should be cautious. I recommend using a sell-on-rise strategy,” Ambala said.
According to her, the Nifty 50 index can expect support near 24,930, 24,800, or 24,650 and resistance near 25,080 to 25,240.
Bank Nifty index outperformed the Nifty 50 on Thursday and ended 523.90 points, or 1.03%, higher at 51,530.90, forming an insider candle, indicating indecisiveness in the index.
“The momentum indicators are bouncing from the oversold region, indicating a possible upside from the present levels. However, the ADX DI- line is still above the ADX DI+ line, indicating weakness in the index. Immediate resistance at 51,700 levels was not touched in Thursday’s rally too, indicating the prevalent weakness in the index to continue,” said Dr. Praveen Dwarakanath.
Options writer’s data showed a short covering of 51,500 calls while the 51,500 puts were seen to be written, indicating a possible bounce till the resistance levels, he added.
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.
