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The Indian stock market, represented by the Sensex and Nifty 50 benchmark indices, is projected to commence trading on Wednesday with a downward trajectory. This anticipated negative start is largely attributed to the prevailing weakness observed in global markets, which often exert significant influence on the domestic financial landscape. The Gift Nifty trends further reinforce this bearish outlook, indicating a potential negative opening for the Indian benchmark index. The Gift Nifty was trading around the 25,183 level, reflecting a discount of approximately 83 points compared to the Nifty futures' previous closing price. This disparity suggests that market participants are anticipating a decline in the Indian stock market at the start of the trading session.
However, it's crucial to acknowledge that the Indian stock market concluded the previous trading session, Tuesday, with commendable gains, effectively halting a four-day losing streak. The Sensex experienced a rise of 317.45 points, equivalent to a 0.39% increase, ultimately settling at 82,570.91. Simultaneously, the Nifty 50 witnessed a gain of 113.50 points, representing a 0.45% surge, closing at 25,195.80. These gains offered a glimmer of optimism amidst the prevailing global uncertainties and served as a reminder of the inherent resilience of the Indian stock market. The positive close on Tuesday could potentially mitigate the extent of the expected negative opening on Wednesday, as some investors may be inclined to maintain their positions or even initiate fresh buying in anticipation of further gains.
Examining the Sensex prediction, the formation of a reversal pattern on both intraday and daily charts is considered a largely positive signal. According to Shrikant Chouhan, Head – Equity Research at Kotak Securities, the crucial support zones for the Sensex are located around the 82,300 level. Maintaining a position above this level could facilitate the continuation of the pullback formation. Conversely, the 20-day Simple Moving Average (SMA) at 82,900 is anticipated to serve as a significant hurdle for the bulls. Successfully surpassing this 20-day SMA could potentially propel the Sensex towards the 83,300 – 83,500 range. On the other hand, a fall below the 82,300 level could trigger a retest of the 50-day SMA at 82,000. Further downside pressure could potentially drag the Sensex down to the 81,600 – 81,500 level. This analysis highlights the importance of closely monitoring these key support and resistance levels to make informed trading decisions.
Analyzing the Nifty OI (Open Interest) data, the highest Call open interest for the Nifty 50 is observed at the 25,300 and 25,500 strikes, indicating potential resistance near these levels. Conversely, the highest Put open interest is concentrated at the 25,000 strike, reinforcing this level as a robust support area. Mandar Bhojane, Senior Technical & Derivative Analyst - Research at Choice Equity Broking, suggests that this combination of technical and derivative signals points towards a potential upside if key levels are maintained. This implies that if the Nifty 50 manages to stay above the 25,000 support level and successfully breaches the 25,300 and 25,500 resistance levels, it could experience a significant upward movement. This analysis underscores the importance of considering both technical and derivative data when assessing the potential direction of the Nifty 50.
The Nifty 50 exhibited a slight rebound on July 15, amidst range-bound movement, ultimately closing the day higher by 113 points. This positive close formed a substantial bullish candle on the daily chart, signaling underlying strength. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, suggests that this market action indicates an attempt to bounce back from near the lower supports of around 25,000 levels. A sustained upside movement from this point could potentially confirm a short-term bottom reversal pattern for the market. According to Shetti, the bounce back observed on Tuesday could be a positive catalyst for bulls to stage a comeback, and a sustained move above the immediate resistance of 25,350 could pave the way for further upside in the near term. The immediate support level is placed at 25,000. This reinforces the importance of the 25,000 level as a critical support zone for the Nifty 50.
Dr. Praveen Dwarakanath, Vice President of Hedged.in, noted that options writer’s data reveals a higher concentration of puts writing at the 25,200 level of the present week's expiry, suggesting a potential move on the upside. He further highlights that the momentum indicators on the smaller time frame have rebounded from the oversold region, indicating strength in the Nifty 50. The index is currently approaching the immediate resistance at the 25,300 level, and a successful break above this level could potentially propel the index towards the 25,600 - 25,800 range in the coming days. This perspective reinforces the bullish sentiment and suggests that the Nifty 50 has the potential to experience further gains in the short term.
VLA Ambala, Co-Founder of Stock Market Today, suggests that a 'sell on the rise' strategy could prove effective in today's session if the Nifty 50 opens above 25,350. This strategy involves selling shares as the price increases, with the expectation of buying them back at a lower price later. Conversely, Ambala believes that a dip-buying opportunity may arise if the index opens at 25,000 or below. Dip-buying involves purchasing shares after a price decline, with the anticipation of a price rebound. Ambala notes that the overall market sentiment is currently bullish, encouraging investors to actively participate in order to capitalize on potential gains. Ambala anticipates that the Nifty 50 will find support between 25,000 and 25,100, and encounter resistance near 25,280 and 25,360 in today's trading session. This provides traders with specific levels to monitor when implementing their trading strategies.
The Bank Nifty index witnessed a gain of 241.30 points, equivalent to a 0.43% increase, closing at 57,006.65 on Tuesday. This positive close formed a bull candle with a higher high and higher low, signaling renewed buying demand from the lower band of the last 8 sessions range. Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, highlights that the Bank Nifty index found support near an upward sloping trendline and staged a notable pullback, reflecting renewed buying interest at lower levels. Importantly, the index has also moved above its 20-day EMA, a short-term bullish signal indicating improving momentum within the banking space. Shah identifies the zone of 56,800 - 56,700 as immediate support for the index, while the zone of 57,200 - 57,300 is expected to serve as a crucial hurdle. He suggests that a sustainable move above the level of 57,300 could trigger a sharp upside rally towards 57,700, followed by 58,200 in the short term. This provides a clear outlook for the Bank Nifty index with specific support and resistance levels.
Hrishikesh Yedve, AVP Technical and Derivative Research at Asit C. Mehta Investment Interrmediates Ltd., emphasizes that the Bank Nifty formed a bullish engulfing candle on the daily chart, indicating strength. Yedve places the short-term hurdle for Bank Nifty near 57,360, while the trend line support is located around 56,500. Yedve advises traders to adopt a buy-on-dips strategy as long as the index holds above the 56,500 levels. This strategy entails purchasing shares during temporary price declines, with the expectation of profiting from a subsequent price increase. This advice is aligned with the overall bullish sentiment surrounding the Bank Nifty index.
Bajaj Broking Research anticipates the Bank Nifty index to extend its consolidation within the 56,500 - 57,600 range. They believe that only a move above 57,600 will signal an extended rally towards 58,500 levels in the coming weeks. Bajaj Broking Research identifies the key short-term support region as 56,000 – 55,500, representing a confluence of the 50-day EMA and a key retracement level. They maintain that the broader trend remains positive and that the current consolidation should be viewed as buying opportunities. This provides a longer-term perspective on the Bank Nifty index, highlighting the potential for further gains while also acknowledging the possibility of continued consolidation in the short term. Therefore, this comprehensive analysis incorporates insights from various experts and provides a detailed outlook on the Indian stock market, encompassing the Sensex, Nifty 50, and Bank Nifty indices.
Source: Nifty 50, Sensex today: What to expect from Indian stock market in trade on July 16