Indian stock market benchmark indices, Sensex and Nifty 50, are likely to see a muted opening on Wednesday tracking mixed global market cues.
The trends on Gift Nifty also indicate a weak start for the Indian benchmark index. The Gift Nifty was trading around 25,925 level, a discount of nearly 20 points from the Nifty futures’ previous close.
On Tuesday, the domestic equity market indices ended flat after hitting record highs during the session.
The Sensex eased 14.57 points to close at 84,914.04, while the Nifty 50 settled 1.35 points, or 0.01%, higher at 25,940.40.
Nifty 50 formed a small positive candle on the daily chart with minor upper shadow.
“Typically, this pattern is indicating a breather action for the Nifty 50 after a sharp surge. Having resisted around the 26,000 mark, Nifty could consolidate further in the short term. The near-term uptrend status of Nifty remains intact. One may expect further range bound action or minor dip in the next 1-2 sessions,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty 50 shifted into a narrow range movement on September 24 and closed flat after achieving a new milestone of 26,000 level.
“The short-term sentiment remains positive, with the Nifty 50 index staying above the critical 21-day EMA (Exponential Moving Average), supported by a bullish crossover in the daily RSI. However, for the rally to continue, the Nifty 50 must decisively break above the 26,000 level. Until then, we expect range-bound movement, with the index fluctuating between 25,800 and 26,000 over the next few hours to a few days,” said Rupak De, Senior Technical Analyst, LKP Securities.
VLA Ambala, Co-Founder of Stock Market Today noted that the Indian markets are currently trading at all-time highs with high valuations. However, some sectors are poised to sustain this upward trend.
“I would suggest all investors consider every dip as a buying opportunity. The Nifty index could expect support levels around 25,890 and 25,820 and notice resistance between 26,070 and 26,125 in the next session,” Ambala said.
Dr. Praveen Dwarakanath, Vice President of Hedged.in noted that the NIfty 50 did not sustain the all-time high level at the closing on Tuesday.
“The Options writer’s data for this week’s expiry shows a strong resistance at 26,000 levels, indicating the index is most likely to close near this level. On the downside, the support continues to be at the 25,500 level in the index, while for intraday 25,850 levels can act as an intermediate support,” Dwarakanath said.
Bank Nifty underperformed the Nifty 50 index on Tuesday and closed 137.20 points, or 0.25%, lower at 53,968.60, forming a bearish candlestick pattern on the daily timeframe.
“Bank Nifty seemed to be weaker than Nifty on Tuesday. At the closing, the daily candle is inching to close below the Bollinger band, indicating a halt in walking on the band. This shows signs of slowness in rally or even a possible reversal from present levels. On the daily chart, momentum indicators are in the overbought zone, which also indicates a possible downside in the index,” said Dr. Praveen Dwarakanath.
According to him, a break of 53,700 levels can trigger 53,000 or even 52,200 levels soon. Options writer's data for today’s expiry shows larger call writing indicating a strong resistance at 54,000 levels.
“In today’s session, if the short covering of the puts above 54,000 levels occurs, it can trigger a decent fall in the Bank Nifty index,” Dwarakanath added.
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