Indian equity markets are poised for a challenging opening on Tuesday, mirroring the negative sentiment sweeping through global financial markets. The Gift Nifty trends indicate a subdued start for the benchmark indices, potentially reversing Monday's gains.
Market Performance and Technical Outlook
The previous trading session witnessed significant strength in domestic equities, with the Nifty 50 closing above the crucial 26,000 mark for the first time. The benchmark index gained 103.40 points, representing a 0.40% increase, to settle at 26,013.45. Meanwhile, the Sensex surged 388.17 points, equivalent to 0.46%, ending the day at 84,950.95.
According to Chandan Taparia, Head of Derivatives & Technicals at Motilal Oswal Financial Services Ltd, the options data reveals critical levels to watch. The maximum Call Open Interest concentration sits at 26,000 followed by 26,100 strike, while Put Open Interest is highest at 25,900 and then 26,000 strike.
"Call writing activity is visible at 26,000 and 26,100 strikes, whereas Put writing is observed at 25,900 and 25,950 strikes," Taparia noted. "The option data indicates a broader trading range between 25,600 to 26,400 zones, with an immediate trading band of 25,800 to 26,200 levels."
Nifty 50 and Bank Nifty Analysis
The Nifty 50 index formed a bullish candlestick pattern on the daily chart and managed to close near the day's peak after successfully defending intermediate pivot levels. For the upward momentum to continue, Nifty must maintain levels above 25,900 to target 26,150 and subsequently 26,277 zones. Support levels are positioned at 25,900 and 25,800.
Bank Nifty demonstrated remarkable strength, surging 445.15 points (0.76%) to close at 58,962.70 on Monday. The banking index formed a bullish candle and achieved a range breakout above 58,500 levels after 15 sessions, recording its highest-ever daily close.
"Bank Nifty is trading comfortably above its short-term moving averages and continues to outperform," Taparia emphasized. "The index needs to hold above 58,750 zones to target new lifetime highs towards 59,500 and then 60,000 levels. Downside support has shifted higher to 58,750 followed by 58,500."
Expert Stock Recommendations
Chandan Taparia has identified three stocks that present buying opportunities for Tuesday's trading session:
Indian Bank: The share price has broken out of its range at all-time high levels and is respecting its 20-day exponential moving average support. The rising ADX line confirms trend strength. Buy with target price of ₹940 and stop loss at ₹870.
Mahindra & Mahindra (M&M): The stock has retested its breakout from a symmetrical triangle pattern on daily charts and resumed upward movement. The positively placed RSI indicator suggests bullish momentum. Buy with target price of ₹3,930 and stop loss at ₹3,640.
L&T Finance: The share price has negated its lower lows formation with higher-than-average trading volumes. The MACD indicator has generated a bullish crossover, confirming positive momentum. Buy with target price of ₹320 and stop loss at ₹289.
Investors should note that these recommendations come from individual analysts and should consult certified experts before making investment decisions.
