The benchmark index, Nifty50, continued to slide due to rising geopolitical concerns and news regarding Adani Group stocks. Adani stocks were in the limelight following bribery allegations from the US Department of Justice and Securities and Exchange Commission against Gautam Adani and other group executives. The index started the session with a gap-down opening at 23,488.45, continued to slide lower, and made a new low at 23,263.15.
However, after touching an intraday low, the index continued to trade in a range above 23,300 throughout the session and closed at 23,349.90. Today, the market action formed a bearish candle with a lower-high and lower-low price structure on the daily chart, along with a comparitive higher volume. On the daily chart, the momentum indicator, RSI, is trending downward in an oversold trajectory and is currently placed around 28, along with a negative crossover on MACD below the central line.
The index has protected the 50-WMA on a closing basis. Hence, moving forward, the 50-WMA and the previous day’s low will be the key levels to watch for immediate strong support. Furthermore, a sustainable fall below the previous day’s low may open a fresh downside window toward 23,000, followed by 22,700 in the coming days. However, on the flip side, some bounce back cannot be denied from the current level, and in case of bounce back, the index may retest 23,600, followed by 26,800.
As per O’Neil methodology of market direction, this sectoral index is currently in a “downtrend”, having made a new low of 23,263.15.
This major sectoral index opened on a flat note but immediately moved lower during the first hour of trade and registered an intraday low of 49,787.10. It retested its 200-DMA and took support around it. It bounced back from its 200-DMA and pared half of its intraday loss before closing at 50,372.90, down 0.50%. It formed a hammer candlestick pattern on the daily chart, indicating support around the 200-DMA. This may act as a critical support area in today’s trading session. The index is expected to find support around 49,400–49,700, and some more bounce back cannot be denied. However, a decisive fall below 49,460 (i.e., 50-WMA) may extend further weakness.
As per O’Neil methodology of market direction, this sectoral index is currently in a “downtrend”, having registered a recent low at 49,787.10.
Two stock recommendations to buy from MarketSmith India
KIMS: Current market price ₹ 584 | Buy at ₹ 570–585 | Profit goal ₹ 692 | Stop loss ₹ 542 | Timeframe 1–2 months
TAJGVK: Current market price ₹ 336.15 | Buy at ₹ 330-340 | Profit goal ₹ 408 | Stop loss ₹ 304 | Timeframe 3–4 months
