The previous week witnessed a notable downturn in benchmark indices, with the Nifty closing 2.55% lower and the Sensex shedding over 1,750 points.
The decline was particularly significant in the metal, realty, pharma, and financial sectors, with realty taking a sharp hit with a 4% drop.
However, the PSU bank index stood out by gaining over 3%. Throughout the week, the market faced persistent selling pressure at higher levels.
Today, Indian share markets are trading lower with the Sensex trading lower by 139 points at the time of writing, while the Nifty is trading down by 48 points.
Bajaj Finance and Bajaj Finserv are the top gainers from the Sensex, while Infosys and L&T are the top losers. Check out this short video for detailed market update: Market Ready by Kotak Securities
Here’s a rundown of today’s expected market movements…
Analyzing the weekly chart, it's evident that a long bearish candle has formed, suggesting the likelihood of continued weak sentiment in the near future.
The short-term structure of the market is indeed weak; however, temporary oversold conditions indicate a potential for a quick pullback rally in the coming weeks.
For short-term traders, it's essential to identify key support and resistance zones.
The 50-day SMA (Simple Moving Average) is a crucial support level, standing at 19,600/65,700, followed by 19,500/65,400.
On the other side, resistance zones are anticipated at 19,800 and 19,900/66,500-66,700.
Given the current volatile market structure, a strategy of buying on dips and selling on upswings is advisable for short-term traders.
For a detailed market analysis, check out our recent webinar on Economic indicators influencing market moves hosted by Kaynat Chainwala, Senior Manager of Commodity Research. Click Here to watch the full video.
Turning attention to Bank Nifty, the 50-day SMA at 45,000 emerges as a pivotal resistance level.
As long as Bank Nifty remains below this point, weak sentiment is likely to persist, potentially leading to a decline towards 44,300-44,000.
A new uptrend can be anticipated only following a breakthrough of the 50-day SMA or 45,000, potentially propelling the index towards 45,400-45,500.
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As always, market conditions can shift unexpectedly, so staying informed and implementing proper risk management is essential while making trading decisions.
See you tomorrow!
Disclaimer: The information provided in this article is based on technical analysis and does not constitute financial advice. Traders should exercise their own judgement and consult with financial professionals before making any investment decisions.
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