Indian Stock Market Set for Cautious Start Amid Mixed Signals
The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to witness a subdued opening on Friday, even as global markets show signs of strength with easing geopolitical tensions. The trends observed on Gift Nifty further reinforce this outlook, pointing towards a muted beginning for the domestic benchmark index. Specifically, the Gift Nifty was trading at approximately 25,345 levels, marking a slight discount of nearly 4 points compared to the previous close of Nifty futures.
Thursday's Market Performance: A Brief Respite
On Thursday, the Indian equity markets managed to break their three-session losing streak, closing in positive territory. The Sensex advanced by 397.74 points, or 0.49%, to settle at 82,307.37. Similarly, the Nifty 50 gained 132.40 points, or 0.53%, ending the day at 25,289.90. This recovery, however, is tempered by ongoing market volatility and indecisive patterns.
Sensex Prediction: Navigating Volatility with Caution
According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the Sensex has formed consecutive indecisive patterns, which are likely to keep the market volatile within a broader trading range. Chouhan advises traders to exercise caution, particularly when dealing with resistance and support levels. He identifies 81,900 as a key support zone, with potential further downside towards 81,500 if this level is breached. On the upside, 82,900 and 83,200 are seen as crucial resistance levels for bullish movements.
Nifty 50 Analysis: High-Wave Candle Signals Indecision
The Nifty 50 index exhibited a high-wave candle formation on the daily chart, characterized by significant activity on both sides, indicating market indecision. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, notes that this pattern, along with a small red candle with upper and lower shadows, signals heightened volatility. Despite regaining the critical 200-day EMA support and closing above it, the near-term trend remains weak, though a short-term bounce is unfolding.
Shetti emphasizes that a sustainable move above 25,500 could confirm a near-term bottom reversal pattern. Conversely, any weakness might drag the Nifty 50 down to recent swing lows around 24,900 to 25,000 levels in the near term.
Derivatives Data and Expert Insights
Derivatives data reveals heavy call writing at the 25,400 strike and significant put writing at the 25,200 strike, establishing this range as a key near-term pivot. Hitesh Tailor, Research Analyst at Choice Equity Broking, advises traders to remain cautious near key support levels and wait for a confirmed breakout above resistance before taking fresh directional positions.
Nilesh Jain, Head of Technical and Derivatives Research at Centrum Broking, expects that while a follow-through move on the upside cannot be ruled out, a decisive breakout above the immediate resistance of the 100-DMA at 25,590 is crucial. He highlights the 200-DMA near 25,130 as a strong support level and notes that the volatility index, India VIX, cooling off towards 13 levels could sustain positive sentiment if it declines further. Jain anticipates some consolidation before the Nifty 50 makes a stronger directional move upwards.
Bank Nifty Outlook: Doji Pattern Indicates Indecision
The Bank Nifty index rallied 399.80 points, or 0.68%, to close at 59,200.10 on Thursday, forming a classical doji on the daily chart, which indicates indecision following the sell-off. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, points out that the index has decisively moved above its 50-day EMA, a positive development signaling strengthening short-term momentum.
Shah identifies the 59,500 to 59,600 zone as immediate and important resistance. A sustainable move above 59,600 could trigger upward momentum, potentially leading to a rally towards 60,100 and 60,600 in the short term. On the downside, the 58,800 to 58,700 range is likely to provide strong support. Holding above this zone may maintain a bullish bias, while a breach could invite selling pressure.
Ponmudi R, CEO of Enrich Money, adds that Bank Nifty's price action remains confined within a short-term rising channel, indicating consolidation rather than trend initiation. With the RSI hovering in the mid-50 zone, momentum remains neutral, reflecting a lack of strong directional conviction. A sustained breakout above 59,600 is needed to revive bullish momentum, while a decisive breakdown below 58,700 could lead to fresh selling pressure. Until then, Bank Nifty is expected to remain range-bound with two-sided intraday opportunities.
Disclaimer: The views and recommendations expressed above are those of individual analysts or broking companies and do not represent the stance of Mint. Investors are advised to consult certified experts before making any investment decisions.
