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Read this | While the big bulls have moved on, retail investors are stuck holding the debris
Sector-wise, IT, Energy, and PSE were the only gainers, while all other major indices closed flat to negative. Market breadth remained weak, with the advance-decline ratio heavily skewed towards decliners at 1:3.
Technicals
Nifty 50 continues to hover around its key support zone of 22,700–22,800, trading below all major moving averages with a negative bias. The 14-day Relative Strength Index (RSI) remains sideways at approximately 39, while the Moving Average Convergence Divergence (MACD) has formed a negative crossover below the central line.
As per O’Neil’s market direction methodology, the market status was downgraded to a Downtrend on Monday after Nifty breached its swing low of 22,787. For a shift to a Rally Attempt, the index needs to close in the green or in the upper half of the day’s range and hold above that level for three consecutive sessions. A follow-through day would then be required to confirm a market uptrend.
Key levels
Support: Immediate support is placed at 22,700–22,800. A breakdown below this range could trigger further downside.
Resistance: A sustained move above 23,000 may lead to a short-term recovery towards 23,350–23,400.
Nifty Bank’s performance
The Nifty Bank index extended losses on Thursday, closing 172 points lower at 49,087.30, below all key moving averages. The index opened on a muted note at 49,212 and remained range-bound between 48,815–49,328 throughout the session. Consequently, it formed a bearish inside-bar candle on the daily chart.
Read this | Weak rupee could pave the way for a long-awaited IT recovery
Among banking stocks, Kotak Mahindra Bank, HDFC Bank, and Axis Bank were the only gainers, while the rest closed lower.
In the previous session, Bank Nifty faced resistance at its 21-DMA. The 14-day RSI is trending sideways at 44, while the MACD is on the verge of a negative crossover below its central line.
As per O’Neil’s market direction methodology, the market status was downgraded to “Uptrend Under Pressure” last Friday after the index breached its 21-DMA and the distribution day count rose to six, indicating signs of selling pressure.
Nifty Bank outlook and key levels
A further increase in the distribution day count or a break below 47,898.35 (recent correction low) would shift the status to a Downtrend.
On the other hand, a move above 50,641.75 (recent rally high) would restore the market status to a Confirmed Uptrend.
Resistance: The 21-DMA at 49,338 remains a key level to watch. If the index reclaims and sustains above this, it could move towards the 50,000–50,500 range.
Support: On the downside, immediate support is placed at 48,700–48,500.
Stocks recommended by MarketSmith India:
● Sundaram Finance Ltd: Current market price ₹ 4,689.70 | Buy range ₹ 4,600–4,720 | Profit goal ₹ 5,570| Stop loss ₹ 4,280 | Timeframe 2–3 Months
Also read | Swan Energy’s rollercoaster ride: A turning point or a temporary rebound?
● Narayana Hrudayalaya Ltd: Current market price ₹ 1,367.80 | Buy range ₹ 1,340–1,380 | Profit goal ₹ 1,630 | Stop loss ₹ 1,250 | Timeframe 2–3 Weeks
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