The Indian equity market is expected to open on a cautious note on Monday following a mixed trend in Asian peers.
The trends on Gift Nifty suggests a negative start for the Indian benchmark index. The Gift Nifty was trading lower at 19,730 as compared to the Nifty’s Friday’s close of 19,745.00,
Nifty was just 9 points away from hitting the 20,000 mark last week. However, the index witnessed a sharp decline on Friday after showing a sustainable upmove in the last six sessions.
The weakness in the index came on the backdrop of steep decline in the IT sector after weak guidance from Infosys, which interrupted the bull run in the benchmark indices.
Also Read: Gift Nifty, mixed trend in Asian markets to Wall Street corporate earnings – key triggers for Indian stock market today
Nifty formed a small negative candle on the daily chart at the lows with upper shadow.
“This pattern indicates a short term top reversal pattern. But, we need confirmation of follow-through weakness to call it a downward reversal pattern. As long as Friday’s downside gap remains unfilled at 19,965 levels, the chances of further consolidation or weakness in the short term,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Meanwhile, on the weekly timeframe chart Nifty formed a bull candle with a long upper shadow, which signals presence of stiff resistance at the 20,000 mark.
Nifty
According to Rupak De, Senior Technical analyst at LKP Securities, the crucial support level for the Nifty lies at 19,700, marked by significant put writing.
“Should the index breach this level, it may lead to a substantial market correction. On the upside, resistance is positioned at 20,000,” he said.
Also Read: Day trading guide for today: Six stocks to buy or sell on Monday — July 24
Bank Nifty
Bank Nifty experienced a volatile trading session with both buying and selling pressure seen from market participants on both ends.
“This volatility indicates indecision in the market, and traders are closely monitoring the price movements. The option data suggests that the market may remain range-bound as there is significant option selling observed at the at-the-money (ATM) strikes. Option sellers often anticipate that the market will remain within a specific range during a certain period,” said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.
As per Shah, the lower end support for Bank Nifty is placed at 45,900 and if the index falls towards this level and holds, it may act as a support, preventing further downside.
“On the other hand, the upside resistance is visible at the 46,350 – 46,400 levels. If the index manages to surpass this resistance area, it could signal further upward movement,” Shah said.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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