Muted Opening Expected for Indian Markets
Sensex and Nifty 50 Likely to See Tepid Start Amidst Mixed Global Cues and Technical Weakness.
- Indian benchmark indices, Sensex and Nifty 50, are set for a muted opening on Monday following mixed global cues.
- On Friday, both indices saw sharp losses, with Nifty 50 closing below key support levels and showing bearish technical signals.
- Analysts suggest a ‘sell-on-rise’ strategy for Nifty 50, while Bank Nifty also faces resistance despite some underlying positive trends.
GG News Bureau
Mumbai, 28th July: The Indian stock market benchmark indices, Sensex and Nifty 50, are anticipated to open flat on Monday, influenced by varied global market signals. Gift Nifty trends also suggest a modest start for the Indian benchmark index, trading at a slight discount to Nifty futures’ previous close.
On Friday, the Indian market closed with significant losses, with the Nifty 50 falling below the 24,900 mark. The Sensex dropped 721.08 points (0.88%) to 81,463.09, and the Nifty 50 declined by 225.10 points (0.90%) to 24,837.00. The Nifty 50’s close below its 50-day simple moving average (SMA) for the first time in weeks, coupled with a widening gap between the 9-day and 20-day exponential moving averages (EMAs), points to a strengthening bearish outlook. The index also breached the 61.8% Fibonacci retracement level, indicating a potential breakdown of its recent recovery attempt.
Analysts suggest a “sell-on-rise” strategy unless the Nifty 50 reclaims and sustains above the 25,200 level. While momentum indicators are in the oversold region, potentially pushing markets higher, the index is at a strong weekly buy level between 24,600 and 24,800, which could present a selling opportunity near 25,200. Support for Nifty 50 is expected between 24,720 and 24,500, with resistance near 24,980 and 25,050.
The Bank Nifty index fell 537.15 points (0.94%) to 56,528.90 on Friday, though it saw a modest weekly gain of 0.44%. The formation of a Gravestone Doji candlestick pattern on the weekly chart signals indecision and potential reversal. The 57,300-57,400 zone is a crucial hurdle for Bank Nifty, with strong support around 56,200-56,100. A sustained move below 56,100 could lead to further selling pressure towards 55,500. While the short-term trend shows weakness with the index closing below its 21-day EMA, the broader trend remains positive, with strong support at 56,000, suggesting a potential buying opportunity. A breakout above 57,100 could push Bank Nifty towards 57,600 and new all-time highs. Traders are advised to book profits on bounces until the index decisively crosses 57,320.
