Stay ahead in the Indian stock market as global cues signal a lower opening for Sensex and Nifty 50. Explore expert predictions and technical insights, including Nifty’s potential consolidation phase and Bank Nifty’s bearish sentiment. Navigate market dynamics with crucial open interest data and resistance/support levels. Make informed decisions with our in-depth analysis for a strategic approach to today’s trading.
In the wake of weak global cues, the Indian stock market indices, Sensex and Nifty 50, are anticipated to open lower on Thursday. Additionally, the trends on Gift Nifty signal a negative start for the Indian benchmark index, with Gift Nifty trading around 21,135 levels in contrast to the Nifty futures’ previous close of 21,169.
The domestic indices underwent a significant sell-off on Wednesday, marking the Nifty 50’s largest one-day fall in a year. On December 20, the Sensex witnessed a sharp decline of 930.88 points, closing at 70,506.31, while the Nifty 50 concluded 302.95 points or 1.41% lower at 21,150.15.
Analyzing the technical aspects, Nifty 50 formed an engulfing pattern on December 20, hinting at a potential downward reversal. This pattern engulfed the candles of the previous three sessions and filled the upgap formed on December 15.
Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities, pointed out, “Zooming into the 15 min charts, we can observe that the Nifty has broken its previous support of 21,337, and there has also been a negative moving average crossover as the 20 period MA has moved below the 50 period MA.”
Gangadharan added, “Momentum readings like the 14-day RSI too have declined sharply from overbought levels indicating a loss of momentum. This is a negative signal for the near term and it also implies that the Nifty has now entered into a short term downtrend.”
Nifty 50
Rupak De, Senior Technical Analyst at LKP Securities, noted, “Nifty failed to sustain above 21,500, resulting in increased call writing at the 21,500 strike, subsequently leading to a significant downturn.” He expects a consolidation phase for the Nifty in the near term, with resistance around 21,500 and support at 21,100.
What is support and resistance?
Bank Nifty
The Bank Nifty index witnessed a decline of 426 points on Wednesday, forming a long bearish candlestick pattern. Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, mentioned, “The Bank Nifty index experienced intense selling pressure, resulting in the formation of a bearish engulfing candle on the daily chart.” While the immediate resistance is at the 47,600-47,700 zone, Shah advises a cautious approach with a preference for selling on any upward movements, given the overall bearish sentiment.
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Nifty Open Interest Data
Deven Mehata, Research Analyst at Choice Broking, highlighted the highest Open Interest (OI) on the call side at 21,500, followed by 21,400 strike prices. On the put side, the highest OI is at 21,000 strike price.
As investors navigate these market conditions, staying informed about key indicators and technical patterns will be crucial in making well-informed decisions.
FAQs
Q: Why are Indian stock markets expected to open lower today?
A: Weak global cues and a significant sell-off in domestic indices on the previous day contribute to the anticipated lower opening for Sensex and Nifty 50.
Q: What technical patterns suggest a downturn in the Nifty 50 index?
A: The formation of an engulfing pattern on December 20, breaking previous support levels, and a negative moving average crossover signal a possible short-term downtrend, according to Subash Gangadharan, Senior Technical Analyst.
Q: What are the key resistance and support levels for Nifty 50 and Bank Nifty?
A: Rupak De anticipates resistance at 21,500 and support at 21,100 for Nifty 50. Meanwhile, Kunal Shah identifies the 47,600-47,700 zone as immediate resistance for Bank Nifty, emphasizing a cautious approach with a preference for selling on any upward movements.