The Indian stock market indices, Nifty 50 and Sensex, are likely to open on a tepid note Monday following weak global cues.
The trends on Gift Nifty also indicate a flat-to-negative start for the Indian benchmark index. The Gift Nifty was trading around 19,694 level as compared to the Nifty 50 futures’ previous close of 19,705.
On Friday, the domestic benchmark indices ended lower for the fourth consecutive session. The Sensex dropped 221.09 points to close at 66,009.15, while the Nifty settled 68.10 points lower at 19,674.25.
Nifty 50 formed a reasonable negative candle on the daily chart with upper shadow.
“Technically this market action indicates a sell on rise opportunity on Friday and this also signals a downtrend continuation pattern. The previous two opening down gaps remain unfilled after a few sessions of its formation and these gaps could be considered as a bearish breakaway and bearish runaway gaps respectively. This could mean more weakness for the markets ahead,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
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Meanwhile, on a weekly chart, Nifty 50 formed a long bear candle this week, which indicates a sharp reversal pattern on the downside.
Normally, a formation of such long negative candles after a reasonable upmove signal chances of an important top reversal pattern as per weekly chart.
Shetti believes the short term trend of Nifty continues to be weak.
Also Read: 5 things that changed for market over the weekend: Gift Nifty, oil prices, FII selling to global cues for Sensex today
Here’s what to expect from Nifty and Bank Nifty today:
Nifty 50
Nifty 50 witnessed consistent selling throughout the week, resulting in a decline of 2.80% from its all-time high.
“This recent correction has caused it to dip below the critical 21-day Exponential Moving Average (21EMA). The sentiment appears bearish at this point, with a key support level identified at 19,600. A breach below 19,600 could potentially initiate a more significant market correction,” said Rupak De, Senior Technical analyst at LKP Securities.
On the upside, he believes, 19,800 is expected to serve as a resistance level.
Also Read: Day trading guide for today: Six stocks to buy or sell on Monday — September 25
Bank Nifty
The selling pressure in Bank Nifty seems to have eased as the index fell 12 points to end at 44,612 on September 22.
“The Bank Nifty index witnessed a significant double top breakdown pattern, which often signals a reversal in trend. This bearish pattern was largely influenced by selling pressure in HDFC Bank. The index breached its 20-day moving average (20DMA) located at 45,000. A break above this level could trigger some short-covering, but the overall sentiment remains bearish,” said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.
Shah believes the prevailing sentiment in the Bank Nifty index remains bearish and as a result, it’s advisable to maintain a “sell on rise” approach.
The next immediate support is seen in the 44,500-44,400 range, he added.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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