Trends on Gift Nifty also point to the Indian benchmark index having a bad start. At a discount of almost 60 points from the prior close of the Nifty futures, the Gift Nifty was trading at approximately 22,048.
On the daily chart, the Nifty 50 formed a lengthy bear candle and dropped below the uptrend line and the 10/20 day exponential moving average, which are both acting as immediate supports.
Following contradictory signals from their global peers, the Indian stock market indices, Nifty 50 and Sensex, are expected to further their losses on Thursday following a precipitous decline in the previous session.
Trends on Gift Nifty also point to the Indian benchmark index having a bad start. At a discount of almost 60 points from the prior close of the Nifty futures, the Gift Nifty was trading at approximately 22,048.
The benchmark Nifty 50 index closed below the 22,000 level on Wednesday, leading to a precipitous one percent drop in the domestic market benchmarks as selling pressure spread across industries.
Close at 72,761.89 points, the Sensex fell 9006.07 points, or 1.23%, and the broad-based Nifty 50 fell 21,997.70 points, or 1.51%.
On the daily chart, the Nifty 50 formed a lengthy bear candle and dropped below the uptrend line and the 10/20 day exponential moving average, which are both acting as immediate supports.
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The recent decrease in Nifty from its near-all-time high of 22,526 levels suggests the creation of a potentially significant top reversal pattern at all-time high. Current weakening may coincide with the construction of a new higher bottom, and the bullish pattern resembling higher tops and bottoms persisted on the daily chart. According to Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, this bullish setup might be ruined by a clear break below 21,860 levels (the last higher bottom of February 29th). This, in turn, could lead to the formation of a bearish pattern resembling lower tops and bottoms.
The Nifty 50’s short-term trend appears to have turned downward, according to Shetti. The Nifty 50 is anticipated to fall to 21,500 levels in the near future if this weakening continues.
Considering the Open Interest (OI) statistics, the call side recorded the most OI at 22,000 strike prices, while the put side recorded the highest OI at 21,800 strike prices.
On March 13, the Nifty 50 index finished the day below 22,000, a decline of more than 300 points.
On the daily chart, the Nifty has broken out of an ascending channel, which could mean that the current uptrend is coming to an end and a decline is about to start. This growing weakness is further highlighted by the fact that the index has fallen below the daily consolidation phase. According to Rupak De, a Senior Technical Analyst at LKP Securities, the 14-period Relative Strength Index (RSI) has fallen below the 50 mark and is displaying a bearish crossover.
According to him, the index would be vulnerable to selling pressure in the near future, with resistance expected to be around 22,250. When looking at the downside, levels of support are 21,800 and 21,700.
Wednesday saw the Bank Nifty index settle at 46,981, down 301 points from the previous day.
The index encountered rejection at the 47,500 mark, which established it as a significant resistance zone, and the bears remained fully in control. Until this barrier is closed above, the index will remain in a “sell on rise” pattern. According to Kunal Shah, a Senior Technical & Derivative Analyst at LKP Securities, the index might fall below the 46,000/45,500 mark if it breaks below its 20-day moving average, which indicates additional selling pressure.