Indian equity benchmarks concluded Wednesday's trading session on a negative note, with both the Sensex and Nifty 50 closing in the red. The market downturn was driven by profit-booking in key heavyweight stocks, including Reliance Industries and ICICI Bank, against a backdrop of mixed global cues.
Market Performance and Key Levels
The Sensex dropped 116 points, or 0.14%, to settle at 85,408.70. Similarly, the Nifty 50 declined by 35 points, or 0.13%, closing at 26,142.10. The weakness extended to broader markets as well, with the BSE Midcap index falling 0.37% and the Smallcap index edging lower by 0.14%.
According to Sumeet Bagadia, Executive Director at Choice Broking, the Nifty 50 started positively and even surpassed the previous session's high briefly. However, it could not maintain the upward momentum and gradually slid to test the day's low of 26,123.
"This price action reflects selling pressure at higher levels and a lack of follow-through buying, indicating short-term exhaustion near resistance," Bagadia commented. He identified the immediate resistance zone at 26,250–26,300, while noting that key supports lie at 25,950–26,000.
He further pointed out that the daily RSI reading of 57.18 is trending downwards, suggesting a mild loss of momentum and advocating for caution in the near term. Market fear, as measured by the India VIX, eased by 2% to 9.19. Derivatives data highlighted aggressive call writing at the 26,200 level and strong put open interest near 26,000, reinforcing that area as a crucial support.
Bank Nifty Shows Similar Trend
Bagadia noted a parallel trend in the banking index. The Bank Nifty also opened higher but faced intraday selling pressure, slipping to a session low of 59,118. This movement signals profit booking after recent gains and reflects a cautious sentiment towards banking stocks.
For the Bank Nifty, immediate resistance is placed in the 59,400–59,500 zone, while supports at 58,800 and 58,900 are critical for near-term stability. The daily RSI for the index stands at 53.55 and is also trending downward, indicating weakening momentum and the potential for short-term consolidation.
Bagadia advised investors to remain selective, adopt a buy-on-dips approach near support levels, and wait for a decisive breakout above resistance before establishing fresh directional positions.
Five Breakout Stock Recommendations
Amid the current market conditions, Sumeet Bagadia has identified five stocks showing breakout potential. Breakout stocks are those that move past their established support or resistance levels, often signaling the start of a strong price move.
1. Olectra Greentech
The stock is trading around ₹1,249.50, showing strength after a sideways range breakout supported by healthy volumes. It found strong support near its previous accumulation zone. A breakout above the prior swing high suggests further upside. The RSI at 58.04 indicates momentum recovery. Buy at ₹1249.50, target ₹1350, stop loss ₹1200.
2. Gujarat Mineral Development Corporation (GMDC)
Trading near ₹545.65, GMDC is showing strength after bouncing firmly from a support level. The stock is on the verge of a trendline breakout; a decisive move above could signal more gains. The RSI of 61.80 reflects rising momentum. Buy at ₹545.65, target ₹585, stop loss ₹525.
3. NTPC Green Energy
Priced around ₹93.27, the stock consolidated sideways before forming a bottom and breaking out of its range with strong volume support. The RSI at 63.53 signals a strong reversal from oversold conditions. Buy at ₹93.27, target ₹100, stop loss ₹90.
4. Dalmia Bharat
After a phase of sideways consolidation, the stock is showing strength, moving higher on healthy volumes from a firm support base. A breakout above the previous swing high indicates improving momentum. The RSI around 66.13 reflects strength. Buy at ₹2109.40, target ₹2250, stop loss ₹2030.
5. Kalpataru Projects International (KPIL)
Trading at approximately ₹1,200.30, KPIL is gaining strength after forming a double-bottom base. The recovery is supported by healthy accumulation during its consolidation phase. The RSI around 60.01 indicates positive momentum. Buy at ₹1200.30, target ₹1300, stop loss ₹1150.
Disclaimer: This information is for educational purposes only. The views and recommendations are those of the individual analyst and not of Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
