The Indian stock market appears poised for a soft start on Wednesday. Key benchmark indices, the Sensex and Nifty 50, are likely to open lower. This trend follows mixed signals from global markets and a weak indication from Gift Nifty futures.
Market Outlook and Previous Session
On Tuesday, the domestic equity market closed in negative territory. The benchmark Nifty 50 managed to hold above the 25,700 level. The Sensex dropped 250.48 points, or 0.30%, to finish at 83,627.69. The Nifty 50 settled 57.95 points, or 0.22%, lower at 25,732.30.
Gift Nifty futures were trading around the 25,738 level. This represents a discount of nearly 53 points from the Nifty futures' previous close, hinting at potential weakness at the opening bell.
Sensex Technical Analysis
Technical analysts are watching key levels closely. Hitesh Tailor, Technical Research Analyst at Choice Broking, noted that the Sensex respected a support zone between 83,100 and 83,200. This area acted as a firm cushion during session lows.
"Immediate resistance for Sensex is now placed near 84,100 to 84,200," Tailor explained. "Earlier upside attempts were capped here before late-day weakness emerged. The current structure favors a neutral-to-cautious stance. Selective accumulation on dips is possible as long as the support zone remains intact."
Nifty 50 Prediction and Derivatives Data
Derivatives data reveals interesting activity. Analysts observed heavy call writing at the 26,000 strike. Strong put writing was also seen at the 25,700 strike. This activity suggests a well-defined near-term trading range for the Nifty.
Tailor added a strategy note. "As long as the Nifty sustains above the 25,600 level, a selective buy-on-dips strategy may be considered. Traders should place strict stop-losses at 25,500 to manage downside risk effectively."
Chart Patterns and Expert Views
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, analyzed the Nifty's formation. "Nifty 50 formed a red candle with a long upper shadow," he said. "This reflects rejection near the 25,900 resistance zone, where heavy Call open interest supply is present."
Shetti also pointed to a positive signal. "A long bear candle was formed on the daily chart with a long lower shadow. Technically, this indicates crucial overhead resistance around 25,900 to 26,000 levels. However, buying has started to emerge from near the lower supports. This hints at the possibility of an eventual breakout in the short term."
According to Shetti, the underlying short-term trend for Nifty 50 remains positive. The formation of a higher bottom reversal pattern on the intraday chart indicates potential upward movement. The market could surpass the 25,900 to 26,000 hurdle in the next few sessions. Immediate support is placed at the 25,600 level.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, highlighted a crucial hurdle. "The Nifty 50 faces a crucial hurdle at the 50-day EMA zone of 25,890 to 25,920," Shah noted. "A sustained move above 25,920 could open the door for a sharp upside rally. Potential targets lie at 26,100 and beyond in the near term."
Shah also identified key downside levels. "On the downside, immediate support is placed around the 100-day EMA zone of 25,630 to 25,600. This will be a key level for traders to watch closely."
Bank Nifty Performance and Forecast
The Bank Nifty index ended Tuesday's session 128.30 points, or 0.22%, higher at 59,578.80. It formed a hammer candle on the daily chart. This pattern indicates a firm rebound from the lower end of the recent range following a recent decline.
Om Mehra, Technical Research Analyst at SAMCO Securities, analyzed the hourly chart. "The 59,300 to 59,100 zone remains an important support area," Mehra stated. "This aligns closely with the 23.6% Fibonacci retracement level. As long as Bank Nifty holds above this band, the downside trend is likely to remain contained."
Mehra pointed to a cap on the upside. "The 59,800 to 59,900 zone continues to cap recovery attempts. A decisive move beyond this zone would be required to signal a return of upward traction. Until then, the Bank Nifty index is likely to remain range-bound."
Consolidation and Breakout Levels
Ponmudi R, CEO of Enrich Money, commented on the price action. "The price action toward the close reflected consolidation near a key resistance zone," he said. "This indicates a pause after the rebound."
Ponmudi R outlined specific levels for a breakout. "A decisive breakout and sustained close above 59,750 to 59,800 is required. This would trigger fresh upside momentum towards 60,000 to 60,500. Failure to clear this band could result in renewed selling pressure. That pressure would target lower supports at 59,300 to 59,000."
He concluded with an overall assessment. "Directional clarity hinges on a breakout above the stated resistance. The market awaits a clear signal for its next major move."
Disclaimer: The views and recommendations presented above belong to individual analysts or broking companies. They do not represent the views of Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
